Nanofilm Technologies - DBS Research 2022-11-04: Weaker-Than-Expected Revenue Growth For 9M22; Growth Strategies In Place

Nanofilm Technologies - Weaker-Than-Expected Revenue Growth For 9M22

  • NanoFilm (SGX:MZH) posted revenue growth of 10% y-o-y for 9M22, weaker than the 15% growth in 1H22. Growth was led by the Advanced Materials Business Unit (AMBU) and Nanofabrication Business Unit (NFBU), offsetting the negative growth from the Industrial Equipment Business Unit (IEBU). See NanoFilm's Announcement dated 02 Nov 2022.
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  • The 10% growth in revenue for the 9-month period is lower than the 15% growth registered in 1H22, despite a typically stronger 2H vs 1H. In the last two years, 1H accounted for close to 40% of total revenue.

AMBU mainly dragged by non-customer Z.

  • The AMBU saw a lower contribution of 78% to total group revenue for 9M22 as compared to the 83% contribution in 9M21, as other customers (besides customer Z) in the 3C segments were more affected by the weak demand and supply chain challenges. Customer Z is expected to contribute ~60% to total group revenue.
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Affected by lockdowns and cuts in customers’ capital expenditure.

  • The weaker-than-expected revenue growth was mainly due to the COVID-19 impact and also customers cutting back on capital expenditure.
  • Lingering effects from the 2Q Shanghai COVID-19 restrictions impacted the business momentum and growth pace in 3Q. The lockdowns have affected the supply chain flow. Some customers are also opting for capital conservation and have delayed and/or cut their capital expenditure amid the increasing macro uncertainties.

Macro headwinds affecting demand and operations of certain suppliers.

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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 | 2022-11-04

Read also DBS's most recent report:
2023-02-03 Nanofilm Technologies - Addressing Short-Term Struggles.

Previous report by DBS:
2022-11-18 Nanofilm Technologies - Downgrade To HOLD As Outlook Worsens.

Price targets by 2 other brokers at NanoFilm Target Prices.
Listing of research reports at NanoFilm Analyst Reports.

Relevant links:
NanoFilm Share Price History,
NanoFilm Announcements,
NanoFilm Dividends & Corporate Actions,
NanoFilm News Articles

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