There is a big issue with Pentamaster. It hardly pay any taxes. As such, the company can have fake customers, fake revenue and fake profits.
And C B Chuah's story is getting inconsistent.
Q1 2022 financial results stated that EV market have fuelled the demand for the Group’s automotive test solutions. However, the company's website at https://pentamaster.com.my does not have any information on EV automotive test solutions.
And out-of-the-blue, the company releases a PR statement that it has 300 semiconductor test equipment and 20 robotic production lines orders.
Suddenly, no more customers for EV automotive test solutions. Who are the customers for the EV automotive and semiconductor test equipment?
"In 1Q2022, revenue from the ATE segment increased by RM43.5 million to RM130.5 million (4Q2021: RM87.0 million), representing an increase of 50.1%.
The increase was largely driven by the demand from the automotive segment given the global momentum in structurally shifting towards EV. Such resilience and growth in the EV market have fuelled the demand for the Group’s automotive test solutions entailing a full range of assembly and test technologies from front-end to back-end solutions. With vehicle manufacturers’ increasingly ambitious electrification plans coupled with supportive regulatory frameworks, the automotive industry will remain robust and contribute positively to the Group’s revenue in the short to medium term."
Semicon industry news by the edge (4.8.22), analyst opines that Malaysia is expected to benefit from the accelerated trade diversion due to US-China trade tension, as more multinational companies shift their supply chain activities out of China into Southeast Asia
Many US high tech semiconductor companies would post negative revenue growth starting 4th Quarter 2022. It would be slightly better to those low tech companies supplying equipments to China for producing chips above 16nm.
“China-based chip fabs that produce logic chips of 16-nm or below, DRAM memory chips of 18-nm half-pitch or less, or NAND chips with 128 layers or more will have to apply for licenses to purchase items from the US”
Pentamaster's 3Q net profit up 6%, revenue rises to new record. KUALA LUMPUR (Nov 3): Pentamaster Corp Bhd’s third quarter net profit rose 5.6% from a year earlier, helped by improved revenue contribution from its automated test equipment (ATE) and factory automation solutions (FAS) segments. The group said net profit for the third quarter ended Sept 30, 2022 (3QFY2022) rose to RM20.07 million or 2.82 sen per share, from RM19.01 million or 2.67 sen per share. Revenue in the ATE segment jumped by RM27.3 million to RM121 million from RM93.8 million, while revenue from the FAS segment registered a 14.7% increase to RM54.7 million from RM47.7 million.
For the first nine months of FY2022, Pentamaster’s net profit rose 12.55% to RM59.7 million from RM53.02 million a year earlier, as revenue climbed 17.38% to RM452.96 million from RM385.9 million.
Pentamaster said it is optimistic about achieving another record year of business growth in FY2022 after recording a double-digit revenue growth for the nine-month period.
It said all other industry segments of the group witnessed encouraging growth during the period, and that contributed positively to both the ATE and FAS segments, with the exception of the group’s electrooptical segment.
“Particularly, the group finds the automotive and the medical devices segments having strong positive momentum heading towards next year, barring any significant deterioration in the global economic situation and geopolitical risk.
Pentamaster Corp Bhd continues to see healthy order replenishment and backlog orders at record levels of above RM500mil as of the end of September 2022.
Out of this, 60% of the orders are from the automated test equipment (ATE) segment and the remaining 40% from the factory automation solutions (FAS) segment, CGS-CIMB Research said in a post third-quarter 2022 (3Q22) results briefing with Pentamaster’s management.
CGS-CIMB Research said Plant 3 will be dedicated to the FAS division, and overall, it will be instrumental to the group in achieving the target of hitting RM1bil revenue by 2025.
The research firm said it was keeping its “hold” rating on the stock, with an unchanged RM3.75 target price based on a 2024 price-to-earnings ratio of 22 times, which was one standard deviation below the Malaysian ATE sector’s five-year mean PE of 31 times.
“We see easing travel restrictions, stronger earnings contribution from the automotive and medical segments, US Food and Drug Administration (FDA) approval for new medical consumables and new customer wins as potential upside devlopments” said CGS-CIMB Research.
The downside risks to the “hold” call are delays in FDA approval for new medical consumables, an extended slowdown in mobile device demand and the deferment of order fulfillment due to slower inventory digestion in the semiconductor industry.
Pentamaster Corp Bhd’s third quarter net profit rose 5.6% from a year earlier, helped by improved revenue contribution from its automated test equipment (ATE) and factory automation solutions (FAS) segments.
AFTER two years of a superbull run, Bursa Malaysia-listed semiconductor and semiconductor-related companies have seen their market capitalisation crumble since the beginning of the year, much like their counterparts in the US and other parts of the world.
On average, share prices of The Big Four outsourced semiconductor assembly and test (OSAT) players — Inari Amertron Bhd, Malaysian Pacific Industries Bhd, Unisem (M) Bhd and Globetronics Technology Bhd — as well as the Big Four automated test equipment (ATE) manufacturers — ViTrox Corp Bhd, Pentamaster Corp Bhd, Mi Technovation Bhd and Greatech Technology Bhd — had declined a significant 40% year to date (YTD) and 5% over the past one month.
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....