ATA’s 2QFY21 came in within expectations at RM40mil, bringing 1HFY21 core profit to RM54mil after excluding RM16mil mainly from unrealized forex gains. (as per AmInvest)
This QR is the strongest QR (June to September), next QR will not be as strong as QR (June to September)
Assuming next QR PAT reduce by 10% (90% x RM38Mil)=RM34.2Million
Assuming Foreign exchange going to report losses of approximately RM4Million
RM34.2Million-Rm4Million=RM30.2Million ( next QR's PAT)
So not so fantastic. Current share price is on the high side. Overvalue.
KUALA LUMPUR (Nov 5): AmInvestment Bank Bhd has upgraded its rating of ATA IMS Bhd to "buy" with higher forecasts and a fair value (FV) of RM2.46 (from RM2.22 previously), pegged at calendar year 2021 (CY21) forecast price-earnings (PE) of 18 times.
ATA IMS is a fast-growing electronics manufacturing service (EMS) company.
“Our target PE multiple is in line with our EMS benchmark forward PE of 18 times, which represents a two times premium above its one-year sector historical forward PE of 16 times to reflect the sector’s brightened prospects,” the research house wrote in a note today.
Besides, it said the EMS sector benefits from companies seeking to diversify their supply chain away from China to Southeast Asia due to rising cost in China and amid US-China trade tensions.
Following this, the research house raised its forecasts for ATA IMS for the financial year ending March 31, 2021 (FY21) until FY23 by 7%-15% to account for higher volume and margin assumptions for its key customer and crafting machine customer, which will extend into FY22.
AmInvestment is forecasting the group’s core net profit to be RM137.9 million for FY21, RM173.5 million for FY22 and RM201.8 million for FY23.
“We came away feeling positive on the group’s strong order momentum going into 2HFY21 (the second half ending March 31, 2021) from its key customer and crafting machine customer, evidenced by higher moulding capacity and its capacity expansion into Pasir Gudang to cater for the growth ahead. We continue to like ATA IMS due to its positive prospects,” said AmInvestment, noting the company’s earnings conference call.
Nevertheless, the research house believes that the stock is fairly priced.
“ATA IMS’ positive prospects arise from being the purest proxy for its key customer’s growth prospects for being the largest contract manufacturer producing the broadest product range; its efforts towards being vertically integrated; and customer diversification opportunities ahead from the US-China trade war diversion, supported by its modular expansion strategy,” said the research house.
At the time of writing today, shares in ATA IMS had risen seven sen or 3.18% to RM2.27, bringing its market capitalisation to RM2.73 billion.
Malaysian EMS companies that previously benefited from the trade war like ATAIMS are now at risk of having their orders reverting back to China if Biden were to be more China friendly.
panic sell due to announcement of vaccine news. It happened to all gloves, HC, ems sector share..but they will soon realised the trade war is not between trump and Xi, but the status of USD in the global market. So its gonna cooldown before US raise the same topic again, product transfer is inevitable consider China has foresee it coming and startup the belt and road initiative solution before it hits them again and again. Eventually EMS will still benefit from it, dont worry.
next support 2.15 if broken then this stock GG liao.
VS Industry also no power to go up. I think the current share price has fully reflected the future prospect of Ata Ims Bhd.
Dyson sales drop in 11.11 sales deal in china. An article said Dyson's product popularity is decreasing in China as more ppl prefer products by Xiaomi.
Ata Ims's total workforce is about 13,000 most of them are foreign worker. If 1 of the staffs kena covid-19, I think the story of Top Glove is going to happen on Ata.
ATA IMS employees are required to strictly adhere to the tight SOP at work, thermal screening, using face masks and frequent sanitisation at work stations.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Fatcaiwst
4 posts
Posted by Fatcaiwst > 2020-10-28 16:43 | Report Abuse
bought at 2.23. kinda regret