Nanofilm Technologies - Strong Growth Momentum
- In view of the recent NanoFilm's share price weakness, we hosted a conference call yesterday with the management of NanoFilm Technologies (SGX:MZH), CEO Gary Ho and CFO Kay Lim, to provide us with a business update and address queries from investors.
- Overall, we are comforted that 4Q21 saw a strong pick-up, both on a y-o-y and q-o-q basis. We expect NanoFilm Technologies to report a strong 4Q21. Demand remains strong and is spilling over into 2022. On the supply front, though the supply disruption issues persist, it is more stable now and 3Q21 could be the worst quarter. With NanoFilm Technologies’s Shanghai Plant 2 now officially certified, we can expect strong growth in 2022.
- Overall, NanoFilm Technologies is projected to report a positive growth in earnings of 8% for FY21F, despite expectations of higher costs, including one-off and higher operating costs as the group expands.
- Our target price for NanoFilm Technologies is reduced to S$4.12 (previously S$4.96), mainly due to a lower growth rate assumption for FY22F, as we have raised FY21F numbers but maintained FY22F forecasts. Maintain BUY call on NanoFilm Technologies.
- At current P/E of 24.5x for FY22F, NanoFilm's share price is trading at ~-2 standard deviation of its average P/E since listing in October 2020. It is also closer to its peers’ average of 22.7x.
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.dbs.com/insightsdirect/ 2022-01-21 2022-01-21
Read also DBS's most recent report:
2022-11-18 Nanofilm Technologies - Downgrade To HOLD As Outlook Worsens.
Previous report by DBS:
2022-11-04 Nanofilm Technologies - Weaker-Than-Expected Revenue Growth For 9M22; Growth Strategies In Place.