Coraza Integrated Technology Berhad - Scaling New Heights

Date: 
2022-06-30
Firm: 
TA
Stock: 
Price Target: 
0.68
Price Call: 
BUY
Last Price: 
0.73
Upside/Downside: 
-0.05 (6.85%)

We initiate coverage on Coraza Integrated Technology Berhad, an integrated engineering supporting services provider, with a Buy recommendation. Ascribing a target PE of 16.0x against CY23 EPS, we derive a TP of RM0.685. This is premised on its: i) established track record in providing integrated engineering supporting services, ii) longstanding relationships with multinational corporations, iii) experienced management team, iv) healthy margins, and v) earnings growth prospects backed by its expansion plans and exposure to high growth industries including semiconductor.

Investment Merits

  1. Integrated Engineering Supporting Services Provider
  2. Experienced and Knowledgeable Management Team
  3. Established Track Record and Relationships with Customers
  4. Continuous Investment in New and Advanced Machinery

Earnings Forecast

From FY22/FY23/FY24, we project Coraza to record a core net profit of RM15.1mn/RM18.4mn/RM21.5mn (+17.9%/+21.7%/+16.9%) or a 3-year CAGR of +18.8%. This is premised on assumptions for sales growth in FY22/FY23/FY24 of +25.0%/+15.0%/+10.0% to RM132.7mn/RM152.6mn/RM167.8mn. Broadly, we expect Coraza’s growth to remain driven by its key end-user markets, including semiconductor, instrumentation, and life science and medical devices. Notably, we expect demand from the semiconductor industry to remain strong alongside robust investments by fabs to expand capacity. The SEMI organisation forecasts global fab equipment spending for front-end facilities to grow above the US$100bn mark for the first time to US$107bn in 2022 (+18% YoY) before moderating to US$102bn in 2023 (-5% YoY).

Source: TA Research - 30 Jun 2022

Discussions
Be the first to like this. Showing 0 of 0 comments

Post a Comment