LIFETIME MEMBERSHIP What a devastating plunge! On 16 August, Nanofilm share (SGX: MZH) crashed 30% following the double bad news concerning the resignation of Chief Operating Officer (COO) and a set of financial result that fell short of analysts’ expectations. The swift meltdown of Nanofilm share price certainly raised many eyebrows as this counter just smashed $6.50 on 26 July. How will Nanofilm share price unravel in the coming weeks?
Back in March 2021, I have written an article that stated Nanofilm share price is worth $4 only. Even though Nanofilm share price has reached my target price, I will not enter this counter at the moment because I do not invest in a company that just got listed within five years. In my opinion, the current turmoil of Nanofilm share price is largely due to the recent departures of former CEO Lee Liang Huang and COO Ricky Tan. So until the day that Nanofilm addresses this issue, it is too early to claim that Nanofilm share price will see bottom soon.
It is certainly not business as usual when two senior managers departed from a company within a short span of time. Dr Shi Xu, the founder and Executive Chairman of Nanofilm, has been appointed as the interim CEO. Given that Nanofilm has just been listed in October 2020, the departures of the former CEO and COO caused a crisis of confidence in Nanofilm share price.
To rescue Nanofilm share price, the management went on the offensive and conducted shares buybacks. In total, 3.04 million of shares had been bought back at this point of writing. It remains to be seen whether the shares buybacks will provide the kind of support needed for Nanofilm share price at this moment. This is because investors must be wondering if Nanofilm share price would do an AEM.
Like AEM, Nanofilm depends on a single customer for a substantial portion of their revenue and a limited number of customers account for the majority of their revenue. Their largest customer accounted for 56.5% of their revenue in 2020. This revenue concentration could pose a risk to Nanofilm share price. And it is happening to AEM already.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested in Nanofilm (MZH) share currently. Whether Nanofilm (MZH) share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
Nanofilm share price to sink or swim?
Will Nanofilm share price spiral out of control like what had happened to AEM? A lot will depend on [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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