Tariff uncertainty is challenging to quantify. NanoFilm has no material direct exposure to the US, and Singapore-based headquarters offers optionality.
NanoFilm's 1Q25 revenue grew 12% y-o-y to S$44m, but gross profit margin disappointed at 27% on softer revenue contribution from the Industrial Equipment Business Unit (IEBU) – 1Q25 revenue constituted around 20% of our full year forecast.
Topline driven by AMBU and NFBU
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Within the AMBU, the Industrial segment led growth at +34% y-o-y on the back of contributions from newly acquired EuropCoating. The Automotive segment grew 15% y-o-y, while the computer, communications, and consumer electronics (3C) segment grew 6% y-o-y.
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Finally, revenue from Sydrogen expanded 158% y-o-y.
Tariff’s the word.
The outlook for tariffs remains uncertain, in our view; although US President Trump has exempted smartphones, computers, and selected electronic devices from “Liberation Day” tariffs, he has promised potential action against semiconductors and the electronics supply chain.
NanoFilm highlighted that it has no material direct exposure to the US, and that its Singapore-based headquarters offer optionality to support key customers in multiple geographies and for future (equipment) exports.
Non-consensus BUY on valuation ground.
Read more at SGinvestors.io.
Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
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