Aztech Global - DBS Research 2022-02-16: Strong Earnings Momentum With Attractive Valuations

Aztech Global - Strong Earnings Momentum With Attractive Valuations

  • Amidst a tough operating environment posed by the global logistical and component challenges, Aztech (SGX:8AZ) reported a remarkable set of results with a 33.5% y-o-y jump in net profit. Net profit margin remains strong at 11.9%. We continue to project an above industry average net margin of 11.5% for FY22F and 11.6% for FY23F, driven by the strong growth in the IoT market and the group’s continuing efforts to improve productivity and efficiency. This should lead to a robust earnings growth of 28%/20% in FY22F/FY23F.
  • Aztech's outstanding orderbook as of 22 February 2022 stood at S$762m, an improvement from S$496m as at 31 December 2021. As we are still in the early part of the year, we expect Aztech to secure more orders for fulfilment in 2022. We expect order momentum to remain strong, translating to a revenue growth of 33% in FY22F and another 19% in FY23F.
  • We lower target price for Aztech to S$1.48 (previously S$1.54) on the back of a 4% cut in earnings (tweak in gross margins), pegged to FY22F peer average of 12x on FY22F earnings. BUY for its strong earnings momentum with attractive valuations. Aztech is trading at an attractive PEG of only 0.23x, vs 0.8x for peers.
  • Where we differ: We are optimistic that Aztech can continue to ride on the fast-expanding IoT market and to generate above industry net margin of >10%.

Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @

Lee Keng LING DBS Group Research | 2022-02-23
SGX Stock Analyst Report BUY MAINTAIN BUY 1.48 DOWN 1.540

Read also DBS Research's most recent report:
2022-04-18 Aztech Global - Strong Orderbook To Drive Growth

Target prices by 3 other brokers at Aztech Target Prices.
Listing of broker reports at Aztech Analyst Report.

Relevant links:
Aztech Share Price History,
Aztech Announcements,
Aztech Dividends & Corp Actions,
Aztech News Articles


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