An automated test equipment (ATE) expert. Transferred from LEAP board to ACE market in Jan 23, TTVHB is principally involved in the development and manufacturing of machine vision equipment and the provision of related products and services. TTVHB’s machine vision equipment is primarily used for the inspection of optoelectronics, solar cells, discrete components and ICs, as well as used in vision guided robotic equipment (See Figure#1-2).

New product pipeline to fuel growth. TTVHB has earmarked 28% or RM8m of the IPO proceeds to strengthen its R&D capabilities, allowing the group to roll out new products and stay relevant to the technology developments and evolutions. The group currently has four new product development projects and four enhancement of existing product projects on hand, with the commercialization expected in 1H23-2025. We reckon the commencement of new products will fuel the group’s earnings, especially as bulk of the new products are for the solar sector, which is expected to continue growing due to the rising adoption of solar energy (Source: Vital Factors).

Riding on high-growth industries. The main industry segments that TTV HB serve includes LED mainly for automotive sector, solar cell for solar PV sector and discrete component and ICs mainly for automotive (EV) and consumer electronic sectors. Despite the slowdown in semiconductor sales, we note that most of these sectors are expected to grow organically in the mid to long-term. The automotive and solar PV sectors, in particular, are expected to grow steadily alongside the global decarbonization efforts, which drive the adoption of EV and solar energy. Additionally, TTVHB stands to benefit from the US-China trade war and China’s “Made in China 2025” goal, as the former will spur strong FDI to Malaysia and the latter will drive strong equipment spending in China.

Another wave on the card? After hitting a high of RM1.70 on its first-day listing, TTVHB has corrected 25.8% to RM1.26, oscillating at RM1.21-1.34 levels. Interestingly, we see some similar patterns in TTVHB’s share price performance with other IPOs – 79% of 2022 IPOs’ stock price start to consolidate for 2–46 days (with low volume) after the first-day rally and stage for another wave thereafter. A successful breakout above the RM1.35 resistance will spur the share price toward RM1.48-1.55- 1.67 levels. Cut lost at RM1.14.

Source: Hong Leong Investment Bank Research - 21 Feb 2023