Overview. Dancomech Holdings Berhad (Dancomech) 4Q22’s core profit rose by 14% YoY to RM6.4mn despite reporting a 5% decline in revenue. The increase in core profit was backed by higher contribution from the trading segment on the back of solid profit margin of >30%.
Key highlights. Metal Stamping business drove Dancomech revenue in 4Q22, up by 29% YoY to RM33.8mn (represents 55% of overall sales) owing to strong demand for air conditioner products.
Against estimates: Inline. Dancomech posted record RM18mn in core profit (+11% Yoy), thanks to higher contributions from Trading, Metal Stamping, and E&E Engineering. Overall, the 12M22 core profit was broadly in line with our estimate at 106%.
Earnings revision. We revised up 2023F/2024F core profit forecast by 8%/ 8% after some housekeeping adjustments.
Outlook. We are sanguine on Dancomech’s business prospects in 2023 to be driven by robust outlook within its Trading, Metal Stamping, and E&E Engineering divisions. Given positive contribution from the acquisition business; Metal Stamping and E&E Engineering, management is planning to continue exploring further opportunities and business collaborations to enhance its profitability in the long term.
Our call. Upgrade our call on Dancomech to a BUY from a HOLD at a higher TP of RM0.47, pegged at 10.5x PER to FY23 EPS of 4.4 sen.
Be the first to like this. Showing 0 of 0 comments
Post a Comment
People who like this
Featured Posts
MQ Trader
Introducing MY's First IPO Fund for Sophisticated Investors!
MQ Chat
New Update. Discover investment communities that resonate with your ideas
MQ Trader
M & A Value Partners IPO Equity Fund has been launched - Targeted 13% Return p.a
Latest Videos
0:17
New IPO: Building management systems (BMS), solar thermal systems and energy-saving services provider, Solar District Cooling Bhd aims to list on the Ace Market!
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....