Core Viewpoint - OMS Energy Technologies, a Singapore-based company, raised US$29 million through its IPO on Nasdaq, but is currently trading lower than its IPO price, indicating potential undervaluation and investment opportunities [1][6][21]. Company Overview - OMS Energy Technologies operates in the oil and gas industry and has been led by CEO How Meng Hock, who has 30 years of experience in the sector. The company was previously under Sumitomo Corporation and faced significant challenges from 2014 to 2019 due to poor oil demand forecasts [2][21]. - The company underwent a management buyout in 2023, initiated by Meng Hock, to ensure the continuity of employment for its 600 employees and their families [3][21]. Financial Performance - OMS has shown a strong financial performance with net income reaching US$34 million within two years post-buyout. The company has zero debt and holds US$126 million in cash, indicating a strong liquidity position [9][10][21]. - The financial metrics for OMS are promising, with gross profit and net income figures for various periods indicating profitability. For instance, in 2H 2025, gross profit was US$68 million and net income was US$47 million [10][11]. Revenue and Client Base - OMS's revenue is heavily reliant on long-term contracts, particularly with Saudi Aramco, which accounted for 67% of its revenue prior to the latest quarter. This reliance introduces fluctuations in revenue recognition due to the nature of call-up orders [12][30]. - The company is actively seeking to diversify its client base and expand its product portfolio to mitigate risks associated with dependency on a single client [29][30]. Cash Management and Future Plans - The company has demonstrated effective cash management, with significant increases in cash holdings over recent periods, attributed to operating cash flow and IPO proceeds [15][21]. - Future plans include potential share buybacks to enhance earnings per share (EPS) and improve market valuation, although there are concerns about the effective use of cash [19][22]. Market Position and Valuation - OMS is classified as a micro-cap company with a market capitalization of approximately US$195.5 million. The current trading price suggests it is undervalued, trading at about 2 times ex-cash price-to-earnings (PE) ratio [7][13]. - The company’s valuation is seen as attractive, especially given its high return on invested capital (ROIC) and the potential for future earnings growth [18][24].