Aztech (SGX:8AZ)'s 1Q25 net profit of S$1.5m (-91% y-o-y) is significantly below expectations, forming only 3% of our full-year estimate.
1Q25 earnings significantly below expectations.
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Aztech generated net cash of S$18.6m from its operating activities as it continued with its disciplined cost and tight working capital management and delivered free cash flow of S$18.3m on prudent capital expenditure. As of 1Q25, Aztech’s net cash position was healthy at S$316m (S$0.40/share), while its net asset value stood at S$0.44/share.
Challenging outlook and strategy to navigate the tough environment.
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maintaining a diversified and extensive network of suppliers to mitigate tariff-related risks;
leveraging on its flexibility to expand its manufacturing capacities in both Malaysia and China;
adopting a disciplined approach to costs, cash and capital management to optimise financial strength; and
tightening its foreign exchange risk management policy to manage and monitor any possible exposure.
With the above strategies, Aztech will be looking to tap on opportunities that might arise from the current challenging situation.
Leveraging Malaysia facility to expand customer base.
Read more at SGinvestors.io.
Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
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