20240227-西牛证券-槟杰科达-01665.HK-Medical_segment_provides_support_during_crucial_time_5页_175kb

Pentamaster (01665.HK) Financial and Segment Analysis

Overview

Pentamaster reported a 15.2% YoY revenue growth to MYR 691.9mn and a 6.7% bottom-line increase in FY 2023, aligning with estimates. The buy rating is maintained with a target price of HK$1.18 per share.

Segment Performance

• Medical segment: Achieved 75.2% YoY revenue growth to MYR 148.2mn, driven by FAS services, expected to remain strong in 2024 and sustain for at least two years.
• Automotive segment: Contained delays in orders, losing momentum, but long-term trends in EV and ADAS are not expected to change significantly.
• Other segments: Semiconductor stable growth; electro-optical segment weak due to stagnant smartphone demand.
• Campus 3: Full operation scheduled for Q1 2025, with production starting in Q3 2024.

Financial Highlights

• FY 2023 gross margin: 30.3%, net margin: 20.6%.
• Projected revenue growth: 17.5% YoY in 2024 to MYR 813.0mn, with improving margins.
• Key risks: Low Hong Kong stock valuation, EV demand decrease, order delays from key customers, and competition for R&D staff.

Investment Recommendation

• BUY rating with HK$1.18 target price, based on clear medical segment visibility offsetting automotive segment headwinds.

Key Risks

• Valuation concerns, reduced EV demand, potential loss of medical orders, and competition affecting R&D.