- Aztech (SGX:8AZ) reported a strong set of 3Q23 results, despite challenging environment, with a 16.9% y-o-y (+24.9% q-o-q) increase in revenue to S$283.4m, mainly driven by sales of IoT devices and data communication products, which accounted for 98.2% of total sales. Its key customer accounts for about 85% of the total sales.
Stable margins despite one-off tax provision.
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- The net profit margin of 10.9% remains healthy, despite a one-time deferred tax provision of S$5.5m relating to retained earnings from an overseas subsidiary, partly offset by a forex gain of about S$0.8m. Excluding these two items, the net margin would be 12.6%, comparable to the 13.0% in 2Q23.
3Q23/9M23 results above expectations.
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- For the 9-month period, Aztech's revenue gained 10.7% y-o-y while net profit was up 15.9%, accounting for 75% and 85% of our estimates for FY23F, respectively, above expectations. The net margin of 11% is a tad better than the 10.5% recorded during the corresponding 9-month period in 2022.
New plant to service existing customers and target new ones looking to expand out of China.
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