Multi-Chem

[weijian]

"a confirmation letter from the vendor’s employee on the vendor’s letterhead and bearing the vendor’s company stamp" - I dont know what type of company (SME not MNC for sure) can issue this kind of letter for employee

you know how difficult for big companies with proper controls to issue this type of letter...and with company stamp? (I imagine those rubber chops that can get from those small shops)

so it is likely the "vendor" is some kind of smallish company rather than some big firms....

If ever annc of CAD comes in, means GG already.

hi opmi,

Multi-Chem 1H26 shows that it has COGS of 297mil (or annualized at ~600mil). The vendor accounts for 5-10% of invoices billed to their customers and extrapolating that to COGS, it means it bills Multi-Chem between 30-60mil sgd per year. Since it can suspend business dealings with Multi-chem, it means it has other distributors as well (or a global presence) and so its actual revenue should be multiple folds of this 30-60mil estimate that Multi-chem pays them.

While there isn't much certainty about this company in terms of size, but surely it doesn't look like a SME to me.

[Big Toe]

Lets get to the crux of the matter. Unless there is a systemic failure in controls, this episode is likely a small hiccup. The market demand is sound. A matter of who holds the cards to most popular vendors, their ability to deliver the product/service across the region.

To put things into perspective, Wells Fargo illegally signed on and billed/overcharged 16Million of its customers to services without their knowledge. It is company wide. One of the most severe corporate compliance and risk management failures in modern financial history. That was in 2016. Fast forward today. Share price about doubled from 2016 despite all the fines and restriction.

So far, multi chem is in no way, close to what wells fargo did. Even if multi-chem convicted, share price takes a hit, earnings may be negatively affected in the short term... still no biggie. At this point, i am more comfortable with Multi-chem than say SK Hynix, Micron Or even DBS.

[weijian]

Multi-Chem has just published its answers to more SGX RegCo questions and below is the timeline thus far:

14th Sept: Madam Han and 2 senior employees attended CPIB interview
15th Sept: Mr Foo attended
16th Sept: BOD/Mgt found out that the 2 senior employees attended CPIB interview
17th Sept: Trading halt with announcement of CPIB interviews officially disclosed
20th Sept: Received suspension notice from vendor on Sunday night
23th Sept: Official announcement of suspension and impact.

RESPONSE TO SGX REGCO QUERIES REGARDING ANNOUNCEMENTS DATED 17, 22 AND 23 SEPTEMBER 2026

M.Tech Products Pte. Ltd. (“M.Tech”) first received written notification regarding the order suspension via email from the Key Vendor on Sunday, 20 September 2026 at approximately 11:07 PM. Concurrently, a separate communication from the vendor was sent directly to regional personnel of the Group dealing with the affected products late Sunday night on 20 September 2026.

https://links.sgx.com/FileOpen/2026-10-0...eID=905872

[BlueKelah]

Lets get to the crux of the matter. Unless there is a systemic failure in controls, this episode is likely a small hiccup. The market demand is sound. A matter of who holds the cards to most popular vendors, their ability to deliver the product/service across the region.

To put things into perspective, Wells Fargo illegally signed on and billed/overcharged 16Million of its customers to services without their knowledge. It is company wide. One of the most severe corporate compliance and risk management failures in modern financial history. That was in 2016. Fast forward today. Share price about doubled from 2016 despite all the fines and restriction.

So far, multi chem is in no way, close to what wells fargo did. Even if multi-chem convicted, share price takes a hit, earnings may be negatively affected in the short term... still no biggie. At this point, i am more comfortable with Multi-chem than say SK Hynix, Micron Or even DBS.

Hi guys just back from 4D3N Tioman Island trip with the wife and kids 

Busy snorkelling, eating oysters and uni, getting a tan, spotting monkeys/monitor lizards and sleeping early. 

Seems like US side bonds rates going crazy and market still up on bad employment news. 

IMHO other than less income due to that distro suspension and possible fine (well even big shot Keppel also got fined globally last time in 2016 oil rig fiasco), company will likely still chug along fine and still have lots of positive free cash flows. 

i usually like to look next 5-10years when investing. Biggest risk is only if there is some new AI security system from big company like microsoft that can be deployed easily and provide comprehensive protection without much training for IT staff.