FY20 within expectation, revenue up 24.3%, core net profit up 10.8%

Full year result within expectation, revenue and PAT accounted for 108% and 96% of our estimates respectively.

4Q20 - revenue up 29.6%, net profit down 33.5%

SAMEE 4Q20 posted higher revenue of RM253.7m (yoy:+29.6%, qoq:-9.2%) however PAT fell to RM14.9m (yoy:-33.5%, qoq:+42.9%) mainly due to weaker margin and impairment loss on financial instruments and contract assets in accordance with MFRS 9 due to higher forward default rate resulted from the Covid-19 situation and unfavourable foreign exchange movements. Adjust for extraordinary items, net core profit higher at RM20.7 (yoy:+48.5%, qoq:-20.7%).

Aerospace Segment - revenue down 4.8% and LBT for 4Q20

For quarter under review, Aerospace posted lower revenue of RM95.9m (yoy:- 22.7%, qoq:-21.9%) and slip into loss before tax of RM1.1m due to decrease in demand of casing products for B737max and casing & aerostructures products for A320neo.

Equipment Segment revenue up 120.0%, PBT up 31.9% yoy

Equipment segment revenue increase to RM157.7m (yoy:+120.4%, qoq:+0.7%), while PBT increase to RM19.6m (yoy:+31.9%,qoq:-9.1%), higher revenue and earnings were due to increase demand from the data storage and semiconductor customers.

Maintain BUY with lower TP of RM11.30

Strong semiconductor demand offset sluggish aerospace segment and expect Equipment segment to drive growth in FY21F. We maintained our BUY recommendation with lower TP of RM7.60 based on lower P/E of 11x on our estimated EPS for FY21F.Industrial Products

Source: Mercury Research - 10 Jun 2020