Micro-Mechanics Holdings - DBS Research 2021-12-07: Tiding Through The Semiconductor Cycle

Micro-Mechanics Holdings - Tiding Through The Semiconductor Cycle

  • Supercycle still has legroom for growth. While we expect growth to moderate going forward, the long-term uptrend remains intact. The semiconductor industry is expected to grow ~9% in 2022 and see a CAGR of 8% in 2020-2025, led by drivers such as Internet of Things (“IOT”), 5G, and automotive demand.
  • Consumable nature of Micro-Mechanics (SGX:5DD)’s back-end tools and front-end equipment parts support regular demand across the cycle. In most downturn periods, Micro-Mechanics’s revenue was observed to be relatively less impacted.
  • We project Micro-Mechanics to achieve a net profit CAGR of 10% between FY21A to FY23F, with a stable dividend yield of 4.1%. We believe Micro-Mechanics’s zero debt will also enable the company to weather industry swings more effectively.
  • Micro Mechanics's share price is currently trading at a 21.9x FY22F P/E, near +1 standard deviation of its four-year historical average forward P/E.

Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.

Lee Keng LING DBS Group Research | https://www.dbsvickers.com/ 2021-12-07
SGX Stock Analyst Report BUY INITIATE BUY 4.05 SAME 4.05

Previous report by DBS Research:
2019-11-29 Micro-Mechanics Holdings Ltd - Revving The Machine

Relevant links:
Micro Mechanics Analyst Report,
Micro Mechanics Target Price,

Micro Mechanics Share Price History,
Micro Mechanics Announcements,
Micro Mechanics Dividends/ Corp Actions,
Micro Mechanics News Articles


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