LNGRES is a company involved in high precision molding, plastic injection molding, metal stamping CNC, electronics manufacturing services and connector solutions.
We gather that the Group is poised to record a high revenue and bottomline in FY18 due to higher orders for its connectors and new customers from USA. Connectors margin for orders from the USA customer (Aviation and defense company) is near 45%.
The Group is trading at an undemanding P/B of value of 82%. Despite consistent profit and dividend (50% payout) track record.
We understand that the Group via its connector business, potentially benefit from volume transfers from Techfast owing to orders from Richard&Manno Co. We believe that the close relationship between both Group's to create synergistic benefits.
The Group has a solid receivables turnover track record, we believe its due to stringent credit controls, has recorded near zero impairments on receivables for the past 5 years.
We believe that the Group will be an outperformer in FY18, with growth trajectory akin to Tech Fast Holdings Bhd, due to its exciting near term growth.
We ascribe a buy with a target price of RM0.50 based on Gorgon growth model, modeling Tech Fast Holdings Bhd as its comparison.
http://klse.i3investor.com/blogs/sectionanalyst/142226.jsp
