SAMEE 1Q20 posted higher revenue of RM195.2m (yoy:+9.2%, qoq:-0.3%) nevertheless PAT was lower compare to preceding quarter due to absent of gain from disposal of land and buildings, excluding the one-off item with net gain of RM7.3m, core net profit was higher (yoy:+3.5%, qoq:+20.2%). The result meet expectation, accounting for 21.5% of our FY20 full year earnings estimates.
Aerospace higher revenue was due to increase sales of casing products for B737 max and business jets, and aerostructures products for A320neo and favorable foreign exchange. Higher EBIT due to higher sales, tooling income and lower operating cost as cost normalised after production ramp up last year. EBIT margin improved to 12.2% (yoy: 10.6%, qoq: 11.0%).
The increase in Data Storage business and favorable foreign exchange translation contributed higher revenue for equipment segment (yoy:+10.2, qoq:+18.4%), however EBIT decrease (yoy:-11.8%,qoq:-33.1%) due to unfavorable sales mix. Management expect the revenue from equipment business to remain flat from semiconductor industry while demand from data storage likely to improve in coming quarters.
The World Semiconductor Trade Statistics lowered its November 2018 estimate of a 3% YoY decline in global semiconductor revenue in 2019 to 12% in May due to trade dispute and in part due to excess in capacity. Aerospace segment which accounts for 56% of Group revenue expected to remain relatively stable. The Group gearing ratio remain low at 0.2x and provide ample room to gear for growth should opportunity arises. We maintained our BUY recommendation with unchanged TP of RM11.30 based on 18x on our estimated EPS for FY20F.
Source: Mercury Research - 3 Sept 2019
Chart | Stock Name | Last | Change | Volume |
---|
Created by kltrader | Apr 12, 2024