Citing the uncertainty, Ada Lim of OCBC Investment Research believes investors should adopt a "wait and see" approach.
"In the absence of significant positive developments and with the tariff outlook remaining uncertain, we now see Nanofilm’s shares as being close to fairly valued," says Lim in her June 13 note.
Lim, citing Nanofilm, says there is 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.
However, second-order implications are challenging to quantify, she warns.
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Nanofilm's operating sites are in China and it has smaller sites elsewhere such as Vietnam, Europe and Singapore.
From these various sites, Nanofilm provides coating services on behalf of customers in consumer electronics and also build equipment sold to various customers.
The way Lim sees it, current data points paint a "mixed picture". Citing data from Canalys, there was a slight 0.2% y-o-y growth in global smartphone shipments in the first quarter of this year, though this was the third consecutive quarter of declining growth.
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Meanwhile, Apple’s 2QFY2025 results were modestly better than consensus estimates despite limited pull forward in demand due to tariffs, says Lim. Apple is believed to be a key end customer of Nanofilm.
"We prefer to stay conservative for now and leave our forecasts intact," says Lim.
Her fair value remains 59.5 cents but has downgraded her call from "buy" to "hold" on valuation grounds.
Nanofilm shares traded at 59 cents as a 9.29 am, down 0.85%.
