KL Trader Investment Research Articles

Author: kltrader   |   Latest post: Fri, 13 Dec 2019, 4:35 PM


SAMEE - 2QFY19 Growth Momentum Continues

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2QFY19 core net profit higher yoy and qoq

SAMEE 2Q19 posted higher revenue (yoy:+22.6%, qoq:+5.8%) and net profit (yoy:+12.9%, qoq:+4.2%). The 1H19 earnings came in within our expectation, accounting for 48.5% of our FY19 full year earnings estimates.

Aerospace Segment revenue up 31.3% but EBIT down 2.4% yoy

Aerospace Segment revenue account for 61.6% of group revenue for 2Q19, increased 31.3% yoy due to production ramp up for the casing products for the new aircraft platforms (A320neo and B737max) and aerostructures products for A320neo however lower profit contribution from Aerospace segment as higher cost incurred for the production ramp up for the manufacturing launch of the casing products and the margin was affected by unfavourable foreign exchange translation.

Equipment Segment revenue and EBIT increased 27% yoy

Equipment Segment surprise on the upside, posted double digit growth with revenue and EBIT increased 27% yoy. The higher revenue was due to increase in sale to customers from HDD and semiconductor industry. Nevertheless on qoq basis, revenue and EBIT fell marginally by 6% and 3.1% respectively due to decrease in HDD business. The equipment segment expected to registered lower revenue for the next quarter due to market adjustment of the semiconductor industry nonetheless the medium term outlook for the semiconductor industry remain strong.

Gearing up for growth, Maintain BUY with unchanged TP of RM11.30

In line with the Group’s expansion, gearing ratio increase to 20.7% compared to 13.1% in previous quarter. The gearing ratio albeit higher, is still low and healthy and enable further growth should opportunity arises. We maintained our earnings forecast and BUY recommendation with unchanged TP of RM11.30 based on 10.7x on our estimated EPS for FY19F.

Source: Mercury Research - 30 Nov 2018

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