Greatech remain Overweight Short term price target: RM7.8 Long term price target: RM9.5
Fed taper likely to occur in Spring 2022 according to economists and analyst predictions. Automation demands remain at all time high and there is no signs of a reversion to the mean as the world is currently in one of the biggest tech revolution since 1999-2000. Tech will continue to be the place growth investors want to be in.
#kukubird88 Need to understand the NOSH between mpi and greatec 07/09/2021 6:51 PM
Here are Mabel Top 3 Pick from Mabel's Collection of Malaysian Techs Companies
Greatech Technology Bhd.
Market Capitalization in MUSD 1,855
Greatech reported strong 140% YoY profits growth in 2Q21, driven by Production Line System orders. Growth from its EV portfolio now contributes 89% of PLS revenue and is expected to drive FY21-23E earnings. The company is now focused on securing new customers from the EV, life science and semiconductor industries.
Inari Amertron Berhad
Market Capitalization in MUSD 2,697
RF segment remains Inari’s key earnings driver, contributing 53% of revenue in 4QFY21. Growth outlook is expected to remain favourable in FY22/23E, driven by strong volume loading from key RF customer, Broadcom.
Malaysia Malaysian Pacific Industries Bhd.
Market Capitalization in MUSD 2,078
MPI is commissioning more machines for expansion. The Semiconductor Industry Association predicts the global semiconductor market to grow modestly by 6.2% in 2021, catalysed by 5G, automotive electronics, IoT, smartphones and wearables. WSTS was more positive on 2021 outlook, with global semiconductor sales growth forecast of +20% YoY.
Greatech Technology to benefit from EV standardization
Automakers have been joining hands through information sharing and standardization as the race to offer affordable electric vehicles (EV) intensifies. Macquarie Equities Research (MQ Research) believes higher EV standardization from the automakers will have a positive spillover effect on factory automation solutions company Greatech Technology (Greatech), with more opportunities as the automakers increase their spending.
Bullish investors who are keen to gain leveraged exposure to Greatech..
Cross-sharing EV platforms indicates higher EV standardization
The Nikkei reported details on EV platform sharing between Honda Motor (7267 JP) and General Motors (GM). The Nikkei highlighted that by sharing EV platforms, the two firms will be able to share >50% of auto parts, standardizing motors, batteries, inverters and other key parts – likely a positive for Honda. MQ Research’s factory automation (FA) analyst reiterated their positive stance on the sector and highlighted standardization will drive structural growth for factory automation applications, with Fanuc as a key beneficiary.
Positive read-through to Greatech
Where does Greatech fit into the ecosystem? From MQ Research’s understanding and channel checks, Greatech does not compete directly with Fanuc (6954 JP) or Keyence (6861 JP) on FA but rather sources components such as vision system, sensors, controllers and industrial robots from these companies to be integrated into its production line for EV which it designs as well.
Greatech plays more of a role of a machine designer and integrator where it installs the FA parts on the production lines as per its clients’ requests which are highly customised. For example, Keyence provides vision systems, controllers and sensors, among others, which are then integrated in the production line of Greatech and used for quality and accuracy checking during subassemblies.
Overall, MQ Research believes higher EV standardization from the automakers will have a positive spillover effect on Greatech with more opportunities as the automakers increase their spending. Historical high orderbook on its way; RM163m or 30% of additional RM550m orderbook guided 2H21 secured. MQ Research expects orderbook to reach historical highs in 4Q21/1Q22 based on management guidance and was encouraged when Greatech announced RM163m additional orderbook (80:20 split between solar:EV) on Aug 26th which brings its total orderbook to RM369m (1Q21 RM293m). With this, the current orderbook split of RM369m is 63:36:2 solar:EV:others.
MQ Research expects another RM380m to be secured in 2H21. This gives MQ Research comfort in its thesis i.e the effectiveness of its strategy to secure orderbook and acquire clients. Recall, Greatech recently upgraded its capex guidance to historical high of RM280m in FY21-22E (2.6x higher than initial Feb’21 guidance) for its 3rd and 4th factories in Penang, mainly to support growing potential EV customer base, which management updated include the automakers themselves. MQ Research believes there will be more room for share price rerating as new orderbook wins are announced, especially in the EV segment.
Action and recommendation
Maintain Outperform. EV orderbook win materialisation is the short-term catalyst for Greatech. It is a one-of-a-kind cleantech proxy in Malaysia with exposure to global emerging growth trends with 94% FY21E revenue originating from ‘cleantech’ industries; solar and EV.
12-month target price methodology
GREATEC MK: RM8.70 based on a price-earnings ratio (PER) methodology
Gain leveraged exposure to Greatech
Greatech shares have been on an uptrend since mid-May, rising from RM4.97 as of 17 May to peak at a closing high of RM7.45 on 18 August, before losing some of its gains in recent weeks to close at RM6.94 (-0.6%) yesterday, 52.5% higher year-to-date.
Last month high around RM7.50 with order book of approximately(~) 200mil, price dropped to ~6.80 with additional orders and total up 369mil , with the price of ~ RM7.10 for nearly double of existing order book which expecting to be 550mil ..when shall we invest ? Past(200mil) , recent(369mil) or now(550mil) ? except of Genetec which has less shares, with the order book of 99mil, how does it beat Greatec ?
KUALA LUMPUR (Sept 23): RHB Retail Research said Greatech Technology Bhd is poised for a technical breakout.
The research house said if a breakout happens above that level, buying pressure may re-emerge to drive the stock towards the RM7.60 historical high, before printing a new high of RM8.00.
Malaysian stocks nowadays depend on the promoters. Since Malaysia SC is very loose, stocks can be easily manipulated. FA temporarily is unusable here in KLSE.
PMBT is banking on Silicon as an essential material for our future economy.
Silicon is the basic material for solar industry. Tesla intends to replace cobalt with silicon for its batteries. China alters global silicon supply demand balance as it pivots on environmental friendly policies. These factors drove silicon price to a fresh 3-year high.
Majority own and manage by the Koon family, PMBT and PM are of the same playbook. More importantly when PM started off with less resources and market recognition in the past, today’s PMBT – leverage on experience acquired and the market respect from PM – earning will ramp up swifter.
Silicon metal is an important element added to various grades of aluminum alloys used in performance applications such as automotive components and aerospace products.
Silicon metal also is a critical raw material in the production of silicone compounds used in numerous products including sealants, adhesives, rubber gaskets, caulking compounds, lubricants, food additives, coatings, polishes, and cosmetics, among others.
In addition, silicon metal is the base material in the production of polysilicon, a purified form of silicon used in solar cells and semi-conductors.
In summary, Silicon demand will be driven by solar and electronics in many years to come, whilst supported by its widely adopted application in various industries currently.
Growth factors
Management and efficient Hydro power supply The competitive advantage of the PMBT series of companies lies in its lean production cost. On top of the very capable management strength, the ultra-competitive position is because of its power procurement contract with Sarawak Energy i.e. Bakun Hydropower.
Silicon production requires substantial amount of power. Energy cost as a single cost component weights more than 40% of the total production cost. The availability of an efficient energy sources alone determines the survival rate of the business.
By securing the ultra-competitive Bakun hydropower supply contract – which is one of the lowest in the world, PMBT will emerge as one of the lowest cost producer in the world.
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....
kpowersohai
249 posts
Posted by kpowersohai > 2021-09-03 23:42 | Report Abuse
mana punye rebound??? @warmplayer....... sembunyi mana??