FY20 core earnings of RM54.9m (YoY: -9.7%) were in line with our and street expectations, making up 98% and 95% respectively. Despite seeing a 19.9% growth in topline numbers, pre-tax margin fell from 31.1% to 24.3%, attributed to an i) increase in operating costs on its two new factories in Batu Kawan and Bayan Lepas, ii) higher R&D spending and iii) rise in sales & marketing expense resulting from the set-up of manufacturing facilities in Taiwan and Korea. No dividend was declared for the quarter. Nevertheless, we raise our TP from RM4.33 to RM6.34 after rolling forward our valuation base year to FY22, based on a higher PER of 45x (from 40x). This is anchored on the acceleration of 5G capex cycle for the telecommunications and semiconductor sectors in the North East Asian region following a short-term disruption in 2020 due to Covid-19.
On the semiconductor equipment business, the demonstration (demo) units have shrunken from 15 in 3QFY20 to only 4 units as most of the demo units were converted into purchase orders before year-end. The current order visibility is around 8 weeks, which is considered healthy. The automation & robotics business units saw two more new OTO (automation) series and KOBOT (robotics) series machines shipped during the quarter, bringing total sales to RM7.6m for FY20. Two ENGEYE (artificial intelligence) series products had been launched in 4Q, hitting its target to deliver all three product-series by 2020. A few more customized KOBOT series products are under development and expected to be delivered to customers in the 1H of 2021. Some new OTO series and ENGEYE series products are pending customer decisions. The Group has doubled its headcount to 100 staff for the Batu Kawan site to respond to more customer enquiries and demand.
Source: PublicInvest Research - 22 Feb 2021
Chart | Stock Name | Last | Change | Volume |
---|
Created by PublicInvest | Nov 22, 2024
RainT
READ
2021-03-17 10:40