He also expects Jubilee’s proposed acquisition of HonFoong Plastics to facilitate further growth in its mechanical business, which would in turn contribute to the group’s bottomline via the electronics business unit (EBU).
“The EBU clocked in a higher revenue of $152 million in FY18 vs. $100m in FY17, mainly driven by higher sales of memory chips that are mostly supplied by SK Hynix. Management guided for stronger sales contribution from its Neophotonics and Samsung electronic components ahead, supported by demand from telco network and data centre upgrading and from high-tech electronics industries respectively,” notes Tan.
“Looking ahead, we expect increasing profit contribution as management guided for increasing orders and said the company will need to increase capacity to take in the excess demand from customers. Customers include home appliances makers such as Philips and Dyson, as well as HP, Flex and Venture,” he adds.
As at 11:08am, shares in Jubilee are trading 2.6% higher at 4 cents or 1.05 times FY19F book.
