Nanofilm Technologies - UOB Kay Hian 2023-02-23: 2022 Results Miss Expectations; Challenging Near-Term Outlook

• NanoFilm’s 2022 earnings of S$44m (-30% y-o-y) missed our estimate by 16% due to a challenging operating environment.
• NanoFilm faces a challenging outlook in 2023 as the macro environment remains tough with inflationary pressures and rising interest rates. Nanofilm’s China operations are expected to remain soft in 1Q23, and should see a gradual recovery only in 2H23.
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Nanofilm's 2022 results below expectations due to multiple challenges.

• NanoFilm Technologies (SGX:MZH)’s reported adjusted PATMI of S$44m (-30 % y-o-y) missed our expectation by 16%. NanoFilm had earlier issued a profit warning and warned of a weak performance, so this does not come as a major surprise.
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• higher expansion costs for future growth,
• disruptions faced by a key final assembly supplier of its major customer,
• China's quick reopening in Dec 22 which has caused a spike in infections, and
• softer end-consumer demand due to recessionary fears.

Two Business Units were down, with Nanofabrication Business Unit (NFBU) being the only bright spot.

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Above is the excerpt from report by UOB Kay Hian Research.
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