Posted by Mabel > 2019-06-19 22:58 | Report Abuse

Products & services

GTT’s offers two categories of automation solution:

(i) Single automated equipment (SAE). Each equipment carries out specialised functions such as material handling, assembly and inspection for the semiconductor and PV industries.

(ii) Production Line System (PLS). This is multiple single automated equipment linked for end-to-end production automation. Thus far, GTT has successfully developed PLS to assist First Solar in its transition from Series 4 to Series 6 products. This transition is ongoing with upgrading opportunities, according to First Solar’s latest 1Q19 results conference call.

GTT plans to use part of its IPO proceeds to develop automated equipment and systems to serve the life-science/healthcare and energy storage/EV-battery industries. For FY17/18, PLS for First Solar made up the bulk of GTT’s revenue, at 71%/84%. Another 25%/11% came from SAE, mainly for Panasonic. The residual 4%/5% came from recurring parts and service income. Today, GTT serves 8-10 clients regionally, mainly US-based. Its biggest customer, First Solar, accounted for 72%/88% of its FY17/18 revenue.

Posted by Mabel > 2019-06-19 22:58 | Report Abuse

Earnings outlook

1Q19 efficiency gains to lead FY19 growth

Due to GTT’s heavy exposure to the PV industry, specifically to First Solar, GTT is not subject to the seasonality of local technology-equipment and outsource assemble and test (OSAT) players. With no comparable historical quarterly numbers due to its recent listing history, we are not able to make proper reviews of 1Q19 results. Nonetheless, from its prospectus, GTT reported revenue/headline net profits of MYR74m/22m in 5M18. 1Q19 revenue/headline net profits made up 79%/58% of 5M18 numbers. Simply annualising 1Q19 top and bottom lines, we believe GTT could report YoY growth in FY19. 1Q19 revenue/core net profit of MYR59m/14m formed 27%/37% of FY18 results. 1Q19 headline net profit included one-off IPO expenses amounting to MYR1m.

Mirroring First Solar’s Series 6 transition at its two Vietnam factories, GTT’s 1Q19 earnings were likely driven by deliveries of PLS. This momentum will likely spill over to 2Q19, given an order backlog of MYR91m as of mid-Apr 2019. This was broken down to MYR85m for PLS and MYR6m for SAE. Adding this to 1Q19 turnover of MYR59m, GTT should easily report revenue exceeding MYR150m in the coming two quarters. This would translate to 68% of its FY18 revenue.

Posted by rr88 > 2019-06-19 22:59 | Report Abuse

Ha ha mabel you promote also it will drop. This is goreng stock lar. Goreng stocks dont give a damn about fundamentals. When time to drop it will drop. So dont waste your time to promote.

This is not for long term investment. Their major client has completed their new factories but only one ongoing. So going forward the big bump in revenue n profit will disappear. It will suffer similar fate like Mi Equipment. It will settle near its ipo price once they fail to deliver the numbers.

Posted by Mabel > 2019-06-19 23:00 | Report Abuse

FY19-20E revenue visibility

For FY19E, we expect revenue to improve 4% YoY. This would be aided by: (i) tail-end recognition of automation for two of First Solar’s Vietnam Series 6 factory conversions; and (ii) PLS deliveries to First Solar’s Factory 2 at Ohio, US, for its Series 6 1200MW conversion. Ohio’s Factory 1 was converted to Series 6 in Apr 2018. FY19 will also be the year when GTT starts to recognise revenue from warranties provided for equipment delivered in FY17. As a practice, it allocates 7% of its revenue as warranties for equipment sold. If no warranty claims are incurred within two years of delivery, GTT will recognise its warranties as a writeback at the COGS level. These writeback will lift profit margins for GTT. A total of MYR22.8m of warranty expenses were provided at end-FY18 (56% of GTT’s profit base in FY21); we have conservatively assumed a claim rate of 70%. Sales surges in FY18/19 should also lift profit margins in FY20/21, if none or little warranty claims is made by its customers.

For FY20E, we project a 13% decline in revenue based on the current schedule (Fig 17) of First Solar’s transition to Series 6 solar panels at its Malaysian plants. We understand that First Solar has six Series 4 factories in Kulim, Malaysia. Of these, two were already converted to 1200MW Series 6 back in mid-2018. Of the remaining four, two have been earmarked for conversion by early 2020. For this, we expect GTT’s PLS division to record sales of MYR106m in FY20. For the last two Series 4 factories, we expect conversion in FY21. This also implies MYR106m revenue for GTT’s PLS division for that year. Besides conversions, First Solar mentioned during its 1Q19 results conference call that it was upgrading its currently-running Series 6 factories. For this, we impute MYR40m of work yearly for GTT from FY19 onwards.

Posted by Mabel > 2019-06-19 23:01 | Report Abuse

Cash generation to fund expansion

As at end-Dec 2018, GTT had amassed net cash of MYR57m, which represented 10% of its current market cap or 9sen per share, as its business is cashgenerative. We believe it is in a position to declare dividends, though payouts could be limited to 30% of net profit as it conserves cash for future expansion into automotive, life sciences etc. GTT has yet to establish a dividend policy. Our assumptions translate to a prospective yield of 2+% for FY19E.

Posted by Mabel > 2019-06-19 23:01 | Report Abuse

Valuations

Initiate with BUY and MYR1.08 TP
Tagged at 15.0x FY19E P/E, we derive a TP of MYR1.08. Our P/E target represents a ~20% discount to the average valuation of 18.5x to Malaysian automation equipment player currently. At 15.0x, it also represents a 10% discount to our average peg of 16.8x for tech hardware players within our coverage (including OSATs, EMS players). The discount is attributed to GTT’s listing on the ACE Market and its customer-concentration risks.

Against local players, the most comparable custom automation equipment player with high customer concentration risk would be Pentamaster Corporation (PENT MK, Not-Rated); up to ~50-60% of Pentamaster’s revenue comes from a single Austrian-based sensor company which is mostly exposed to the smartphone segment. Trading at 16.3x CY19 P/E for 27% FY18-20 earnings CAGR based on consensus projection, Pentamaster is rated BUY with an average TP of MYR5.12 by two brokers based on a P/E pegs of 20.2x/17.7x CY19/CY20.

Posted by Mabel > 2019-06-19 23:02 | Report Abuse

Against peers with solar PV automation exposure

At 12.7x P/E now, GTT is trading at a ~20% discount to regional peers with sizeable solar energy exposure; their average P/E is 16.1x. GTT’s closest listed peers are abroad: ATS Automation (ATA CN, Not Rated) in Canada and NPC Inc (6255 JP, Not Rated) in Japan. They trade at an average 16x CY19 P/E despite lower profit margins and ROEs. NPC Inc is rated BUY by only one local broker which has projected 56% earnings growth to USD5.8m for FY8/19; 1HFY19 PATAMI of USD2m only met 34% of FY8/19E projection by this broker.

We believe that GTT is enjoying better margins due to its cost base which is in MYR. Coupled with cheaper labour cost, an asset light business model and tax exempt status, GTT is able to offer cost-effective solutions without sacrificing its margins, as illustrated by its high ROEs.

Posted by Mabel > 2019-06-19 23:02 | Report Abuse

Risks

Semiconductor cyclicality
GTT’s financial performances are closely tied to demand in the PV industry. While the PV industry is expected to trend upwards due to the long-run global decarbonisation of electricity, an unexpected downturn arising from global trade tensions or regulatory changes could cause a chain reaction, starting with a lack of infrastructure investments by key clients.

Forex
GTT is exposed to USD as all of its sales, except purchase orders from First Solar Malaysia, are in USD. In FY17/18, 81%/90% of its revenue was derived from overseas. Meanwhile, 31%/38% of its FY17/18 purchases of imported components were denoted in USD. Although this provides some natural hedging, GTT is still a beneficiary of a weaker MYR vis-à-vis the USD. Our sensitivity analysis suggests that for every 1% change in our base-case exchange rate of MYR4.10/USD1, GTT’s FY19/20E net profits could vary by 2+%.

Customer concentration
First Solar’s three sites in Malaysia, Vietnam and the US accounted for 88% of GTT’s FY18 revenue. The group is a critical customer of GTT’s PLS. We believe that in the immediate three years, First Solar will continue to account for 70-80% of GTT’s revenue. Business downturns for this key client would be a major risk for GTT.

Pioneer status
GTT was granted pioneer status which exempted it totally from Malaysian corporate taxes for five years beginning 29 Mar 2013. This status expired on 28 Mar 2018. In Nov 2018, it was granted an extension of the status for another five years, from 29 Mar 2018 to 28 Mar 2023. Failure to showcase new adoption of its latest products could risk the termination of this status, resulting in higher taxes for GTT from 2Q23 onwards.

US-China trade tension
In early-2018, US imposed a safeguard tariff (over four years – with a 30% tariff in the first year, reducing gradually to 15% in year four) on solar panels from China, mostly crystalline solar panels, to level the playing field for US suppliers. This disruptive move has seen China-based solar panel manufacturers shifting out their capacity to neutral grounds such as Malaysia, Thailand and Vietnam. While this shift in production may benefit automation companies in the region, we also note that this development is hampering new capex investment by the existing solar panel manufacturers in the region.

Posted by rr88 > 2019-06-19 23:06 | Report Abuse

The major flaw in their business model is their equipment are for new solar factories. Not everyday new solar factory coming up. And anything related to solar will not flourish just like electric cars. No demand. Not practical for ordinary joes.

Posted by Mabel > 2019-06-19 23:08 | Report Abuse

https://www.youtube.com/watch?v=g9G201XW4Js

Time for some beautiful music..

Just imagine will be cruising at 170km/h on Mabel High Speed Rail on the ECRL Corridors listening to this beautiful music, drinking cocktails and still can afford eating lobsters while enjoying the beautiful landscapes of the enchanting South China Sea...

See you at the next stop :)

Posted by Mabel > 2019-06-19 23:10 | Report Abuse

@rr88 Ha ha mabel you promote also it will drop. This is goreng stock lar. Goreng stocks dont give a damn about fundamentals. When time to drop it will drop. So dont waste your time to promote.

This is not for long term investment. Their major client has completed their new factories but only one ongoing. So going forward the big bump in revenue n profit will disappear. It will suffer similar fate like Mi Equipment. It will settle near its ipo price once they fail to deliver the numbers.

Touche rr88 Dear

I'm not promoting. I'm just sharing some material that I received today for the benefits of the team who want to get on board in the next station. This is definitely a NOT BUY call. It's just sharing information if anyone still want to be part of this company success story..

By the way, it's only a drop of 0.025 sen. As I said earlier...No feel...

At this price, I'm still making 33 % margin if I want to cash in...However, I believe this company can still go higher...

Maybank tends to benchmark this company with Penta 2.0 :)

Posted by rr88 > 2019-06-19 23:11 | Report Abuse

Looks like mabel has gone nuts. He must hv whacked it again at 1.00 this morning n very nervous now of the drop. Well, goreng stocks will always drop after being overcooked for 4 consecutive days.

Posted by Mabel > 2019-06-19 23:15 | Report Abuse

Hahaha...

Don't worry this is nothing compare to Bumi Armada...

I'm just having fun here and to be honest I really enjoy your company..

We have a great team here...

Enjoy your catch from Greatec and TM. As long you are making money you are definitely on the right track.

Good night and Sweet Dream :)

Posted by rr88 > 2019-06-19 23:16 | Report Abuse

You r not that smart mabel. People hate all these long write ups. Look bad on you. Dont do it again. What you want to see is how well it will be supported on pull back. Dont count your chickens before they hatch.

Posted by Mabel > 2019-06-19 23:25 | Report Abuse

Touche!

Posted by calvintaneng > 2019-06-20 00:05 |

Post removed.Why?

Posted by rsim03 > 2019-06-20 00:06 | Report Abuse

hongah...

Posted by Chin Yang Aster Koh's > 2019-06-20 00:09 | Report Abuse

Hoho ,habis yang buy 0.99-0'.98sen ,

Posted by GoodTrade > 2019-06-20 00:52 | Report Abuse

Who is still holding this baby ? ... Traders may consider to cash out as soon as possible, unless u r expecting for a better revenue and profit in the next qr in 2 months time ...

Posted by apolloang > 2019-06-20 01:38 | Report Abuse

Posted by calvintaneng > Jun 20, 2019 12:05 AM | Report Abuse

GREATEC = GREAT-TRAP OR GREATER FOOL TRAP? SEE ARTICLE BY DR NEOH ON GREATER FOOL, Calvin Tan comments

https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/211541.j

no down yet u say trap......the trap stock is uzma lah

Posted by apolloang > 2019-06-20 01:50 | Report Abuse

other traps,butaland,sasbabi,kwantas,T7,penergy,harnlen,mphbcap,cbip,cscsteel,bjcock,jtiasa,wtk,media,kuih talam,uzma,bpuri,tdm,kps,TA,and many more.remember all the die dog stocks?

Posted by calvintaneng > 2019-06-20 01:50 | Report Abuse

Apollo still here?

OK now Greatec is 96.5 sen and Uzma only 63 sen

Give it a one year period then SEE how greatec will be compared to Uzma

Remember this post by Calvin

Uzma at 63 sen versus Greatec at 96.5 sen dated 20 June 2019

Everyone please take note

Posted by apolloang > 2019-06-20 01:53 | Report Abuse

why need so long......3 months is enough

Posted by apolloang > 2019-06-20 01:54 | Report Abuse

greatec will up faster than sleeping uzma

Posted by apolloang > 2019-06-20 01:58 | Report Abuse

anyway when greatec 71cts I told u to sell uzma at 68cts to switch but u stubborn

Posted by calvintaneng > 2019-06-20 02:07 | Report Abuse

Yes ah?

These are also Chun chun calls

Super Enterprize. Up 200%
Pohuat up 200%
Silk up 200%
Tmakmur taken private
Kulim taken private
Weida taken private
Daiman taken private
TheStore taken private
Wangzng. King of fortress
Lafarge up 100%
Padini up 100%
Supermax up 100%
Pm Corp 3 times up 100%
Curimin (currymee) up 100%
Naim double In price and the limit up
Azrb at 35 sen. Up by 50%
MyEg. My Emas gold. Up 100%
Ipmuda. Limit up. The leaping lizard
MUI bhd up from low of 12 sen to 24 sen. Up 100%
Daiman or diamond taken private
Drb up 100%
Tawin big win. Up 100%
Drb c30 up 200%
Kkb. Kaboom Kaboom booming.
Pantech. All tech
Prestar or pre star at 45 sen. Up 200% in upcycle
Masteel at 66 sen. Upcycle was rm1. 80
Jaks at 40 sen. Jaks jumped jumped over RM1. 80 up 400%
Rcecap at 80 sen. Best of ah long. Up 100% to Rm1. 60
Dutaland at 39 sen. After divvy now only 29 sen cost

So many others chun chun calls in their cyclical upside

Check them all out in their respective treads

So many up from 100% to 400% and more than half dozen taken private. So far not even one delisted yet or go bankrupt

Posted by apolloang > 2019-06-20 02:09 | Report Abuse

got pericowsai,mpcock….remember that.....hahaha

Posted by apolloang > 2019-06-20 02:12 | Report Abuse

aiya just remember another in the blacklist.....majuberak....hahaha

Posted by calvintaneng > 2019-06-20 02:22 | Report Abuse

Hahaha

Not one delisted yet so far
Mp corp will come out from pn17
Perisai just won rm80 mil job from petronas
Mj perak still got Proton City

Maximum loss of one stock is 100%

Pohuat, Padini, silk, jaks, super Enterprize already made more than 1000% in these 5 stocks

These 5 stocks alone can cover more than 10 stocks should they go bankrupt and delisted

So far yet to see one hor

Goooood night

Zzzzz,,..

Posted by apolloang > 2019-06-20 02:37 | Report Abuse

1 greatec will cover at least more than 10 stocks I lost

Posted by apolloang > 2019-06-20 02:40 | Report Abuse

mpcock and pericowsai....both suspended all gone.even not gone in future 20 become 1 for mpcock and 100 become 1 for pericowsai.....people throw dart 1 or 2 trhow already hit bullseye,why need to throw so many times only hit once

Posted by Mabel > 2019-06-20 05:47 | Report Abuse

Calvin

What's your thoughts about TalamT and Asianpac?

Very slow moving counters.. Still got impact with the latest developments in ECRL?

Posted by Mabel > 2019-06-20 05:50 | Report Abuse

Sorry about the long write up on Greatec. I thought it was good to share what I just received from Maybank just to give everyone a flavor what to expect from Greatec..

It's a matter of flavors. Some people likes details while some don't..

Anyway, now you have full visibility of Greatec instead of just hearsay..

Have a great day!

Posted by Depeche > 2019-06-20 06:13 |

Post removed.Why?

Posted by 553871575098935 > 2019-06-20 06:59 | Report Abuse

Thnks Mabel for sharing the write-up. Keep doing it bro. Can't understand why some people don't like it.

Posted by 553871575098935 > 2019-06-20 07:00 | Report Abuse

Thnks Mabel for sharing the write-up. Keep doing it bro. Can't understand why some people don't like it.

Posted by bojed > 2019-06-20 07:06 | Report Abuse

Depeche: Wow even if Greatech drops down to 0.9 today(hopefully not God-willing), you can still go home with 30% profit!

Good job.

Posted by bojed > 2019-06-20 07:22 | Report Abuse

Another day, another challenge.

Posted by sooaria > 2019-06-20 08:02 | Report Abuse

Mabel, thanks for your write up, I have read it , all the long write up, it is worth your effort putting this for Greatec

Posted by sooaria > 2019-06-20 08:03 | Report Abuse

My summary from your long write up Mabel, which is worth to share with anyone who cares to read :-

Mabel : Potential transfer to Main Market?

GTT was listed on the ACE Market of Bursa Malaysia on 13 Jun 2019. Based on its recent 1Q19 earnings, prima facie, it is likely to be able to meet the requirements for a transfer to the Main Market. In order to qualify for transfer, GTT must have uninterrupted profits for 3-5 full financial years based on audited financial statements. It must have aggregate after-tax profits of at least MYR20m and an after-tax profit of at least MYR6m for its most recent financial year. GTT delivered after-tax profits of MYR26m in FY17 and MYR37m in FY18. In 1Q19, its after-tax profit was MYR12.5m. GTT’s transfer to the Main Market, if it meets the profit qualification for the entire FY19, could happen in early-2020, after its FY19 accounts are audited, we estimate. The transfer can happen even earlier as GTT was also profitable in FY16, with after-tax profit of MYR6m.

Posted by sooaria > 2019-06-20 08:06 | Report Abuse

Do you think the Management of Greatec at all cost, will make sure that it gets Greatec to transfer to Main Board ?
The answer is very obvious, Of Course the Management of Greatec will ensure that happen . ( similar like MMSV) , then after transfer no one will know the answer !!
Till the time Greatec gets transfer to Main Board, the price of Greatec, surely the Management of Greatec will ensure that up and up it goes.

Posted by skyrider > 2019-06-20 08:09 | Report Abuse

When the lower tool deliveries to First Solar is reflected in Q2 or Q3, then Greatech will go below 70 sen.

When the tool deliveries to the 5th factory, i.e. Ohio S6 factory 2 is finished (probably by year end) and no order from new solar factory (or new order not in time to fill the gap), then Greatech may go below 50 sen !!

.... and this is just CONSERVATIVE prediction !!

Previously I predicted that comcorp will go below 20 sen, and today comcorp is at 7.5 sen !!

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Posted by skyrider > Mar 21, 2018 9:08 PM | Report Abuse X

If a few negative qtrs without BCM contributions, it may even go below 20 sen!

Posted by sooaria > 2019-06-20 08:09 | Report Abuse

Dear Traders / Investors,
The choice is yours to make : " believe in short term in Mabel," believe, and make money and profit"
or immediately follow Calvin advice and run for your life.

Let's see how the market goes today for Greatec. Cheers, and lets huat together !!

Posted by kk7198 > 2019-06-20 08:22 | Report Abuse

If it breaks 0.88 sen , I gonna chop off or else just ride on.Anything is possible, hope for a coming new high.

Posted by kk7198 > 2019-06-20 08:25 | Report Abuse

Calvin sifu or Mabel queen? Just like choosing Musang King or Black Thorn...which one do you prefer?

Posted by Richard KH Wong > 2019-06-20 08:36 | Report Abuse

Hope today Greattech will go up! :)

Posted by bojed > 2019-06-20 08:39 | Report Abuse

I'm in such a good mood today, maybe it's the early morning coffee, maybe it's the good morning vibe, I don't know.

Well, hopefully the sun will brightly shine on Greatech today. If it doesn't, 0.94 will be my exit point, so that I can still lock in a very significant profit amount.

All the best to all!

Posted by HantuKopi > 2019-06-20 08:42 | Report Abuse

No problem with long write up, i did read them

Posted by bojed > 2019-06-20 08:59 | Report Abuse

1 minute to launch.

All the best guys.

Posted by Poison13 > 2019-06-20 08:59 | Report Abuse

Thx mabel