Maybank IB raises earnings outlook on Greatech
KUALA LUMPUR: Maybank Investment Bank Research has raised its earnings forecasts for Greatech Technology Bhd following the release of its 1H21 results, which came within expectations.
The research house, which has a "buy" call, increased FY22 and FY23 earnings forecasts by 19% and 18% respectively due to additional order assumptions from existing and new customers in view of sustained job wins as well as the upcoming Batu Kawan 2 facility in Penang, which will entail higher capacity.
The group also has expectations of robust demand with a view a view to expand and/or purchase additional facilities, said Maybank IB.
It raised its target price to RM8.05 from RM6.75 previously, pegged to an unchanged 49x FY22 price-earnings ratio of about plus-two standard deviation premised on favourable earnings growth outlook from existing and new customers.
With core net profit in the six months of the year coming to 57% and 54% of the research house's and consensus full-year estimates.
In 2Q21, earnings growth was mainly driven by production line system (PLS) orders from the electric vehicle segment, namely from Lordstown Motors.
The EV segments contributed about 89% to Greatech's PLS revenue in the quarter.
The earnings were partly offset by higher transport costs, increased raw material costs and lower revenue from single automated equipment and provision of parts and services.
https://www.thestar.com.my/business/business-news/2021/08/12/maybank-ib-raises-earnings-outlook-on-greatech
