DBS Group Research has maintained its "buy" call on Grand Venture Technology following its FY2024 earnings that came in above expectations.
With an "upbeat" guidance for the current 1HFY2025, analysts Amanda Tan and Ling Lee Keng have raised their target price to $1.12 from $1.04.
For the year ended Dec 31 2024, the company reported earnings of $10.9 million, up 96% y-o-y. Revenue hit a record as it captured a bigger volume of businesses from semiconductor clients.
GVT's share price has gained by three-quarters in the past 12 months to change hands at around 85 cents.
Even so, the DBS analysts Tan and Ling are of the view that this counter is "still a promising grand venture, as long-term semiconductor uptrend remains intact."
"Notwithstanding cyclicality, the semiconductor industry is poised for growth, owing to the push towards digitalisation," they add.
"The long-term semiconductor outlook looks bright, which should benefit GVT, as more than half of its revenue comes from the semiconductor segment," state Tan and Ling.
They have raised their FY2025 and FY2026 revenue projections by 11% and 6% respectively due to stronger-than-expected contributions from the semiconductor segment.
Accordingly, their earnings estimates for the counter for the same two years have been lifted by 7% and 8% respectively.
See also: Analysts, bullish on semicon recovery, up Frencken’s target price
However, they have included slightly higher finance costs from increased leverage and toned-down gross margin assumptions due to higher costs related to onboarding new customers.
Their revised target price of $1.12 is pegged to 21x FY2026 earnings, which is close to its historical mean, to account for more meaningful volume production for new so-called "front end" customers.
