Nanofilm Technologies - A Look At ESG
- According to NanoFilm Technologies (SGX:MZH)’s 2021 Sustainability Report released on 20 May 2022, NanoFilm owns more than 80 patents and trademarks, not including over 40 applications that are pending. The group has more than 300 employees worldwide engaged in Research and Development (R&D) and engineering and has achieved a daily turn-around capacity of more than 5.0m high volume and high mix parts.
- NanoFilm is working towards zero waste water discharge from its factories. In Shanghai where the bulk of its manufacturing is located, the group has completed the installation of reverse osmosis filtration systems to recycle the water used in production activities. NanoFilm will work towards implementing this at its other production sites in the subsequent years.
- We note that NanoFilm’s Industrial Equipment and Sydrogen business segments support the Environmental pillar in Economic, Environment, Social and Governance (EESG) and NanoFilm has revealed EESG goals for 2030.
- In our view, the Governance pillar of NanoFilm’s ESG can be improved. We note that, post its listing, there have been three C-suite level resignations (Chief Executive Officer, Chief Operating Officer and Chief Human Resources Officer). Of these three departures, its Chief Human Resources Officer joined Nanofilm in Aug 2021 and will be leaving NanoFilm on 24 Jul 2022.
- We value NanoFilm at 23.5x P/E (-1 standard deviation from its P/E multiple over Oct 2020-Jun 2022) on our FY23F EPS forecast, leading to a target price of S$3.07. We reiterate our ADD call on NanoFilm given its long term earnings growth prospects.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
William TNG CFA CGS-CIMB Research | https://www.cgs-cimb.com 2022-07-01 2022-07-01
Previous report by CGS-CIMB:
2022-06-30 NanoFilm Technologies - Reflecting 1H22 Concerns
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