SINGAPORE (Feb 14): Analysts from RHB and CIMB are upbeat over electronics manufacturing services provider Valuetronics Holdings following its stellar results in 3Q.
Valuetronics in 3Q saw core net profit surge 70% on the back of a 35% increase in revenue.
RHB is upgrading Valuetronics to “buy” from “neutral”, and raising its target price to 65 cents from 57 cents previously.
In a Tuesday report, RHB analyst Jarick Seet says Valuetronics’ consumer electronics (CE) segment is “regaining a foothold” on top of continued growth in its industrial and commercial electronics (ICE) unit.
“The worst is over for the CE segment, and its prospects should remain stable going forward,” Seet says.
Meanwhile, CIMB is keeping Valuetronics at “add”, and raising its target price to 72 cents from 60 cents previously.
“In our view, Valuetronics is still cheap at 8.7x FY17 P/E (3.5x ex-cash), given its sustainable earnings growth and attractive FY17-19F dividend yields of 6.4%,” CIMB analyst Ngoh Yi Sin says in a Monday report.
In addition, Ngoh believes Valuetronics is en-route to a re-rating, on the back of “sustainable earnings growth and attractive dividend yields”.
Looking forward, Valuetronics’ automotive and printing segments are also likely to spur growth.
According to RHB’s Seet, its automotive segment is likely to add a new customer in July, and is expected be one of the key drivers going forward.
At the same time, Valuetronics’ printing segment “may likely continue to prosper” after having gained an edge over its competitor, Seet says.
As at 12.05pm, Valuetronics Holdings is trading 1 cent lower at 64 cents.
