See: Manufacturing Integration Tech bags new orders worth $14.2 mil
In a Wednesday unrated report for retail investors, analyst Nicholas Leow says going forward, MIT should see more revenue visibility due to its higher exposure in the more stable original equipment manufacturing business for global giants such as Hewlett Packard, Form Factor and Sony.
As it is, the global semiconductor market is expected to grow 17% in 2017 and 4.3% in 2018. Meanwhile, total billings in 9M17 have so far surpassed total billings for the whole of 2016. All these indicators are positive for MIT and point to a turnaround in 2017 with sustained momentum into 2018.
In addition, MIT had a huge net cash $19.8 million as of 30 Jun 17, or 37% of its current market capitalisation. The company also has investment properties worth almost $9 million. Consensus net profit expectation for 2017 is currently at $5.6 million which would put MIT’s valuation at 10.6x FY17F PE.
Meanwhile, M&A interest in the semiconductor space remains high. SGX-listed ASTI Holdings is currently in discussions with Shanghai Pudong Science and Technology Investment Co's potential purchase of STI Group - a wholly-owned subsidiary of ASTI Holdings.
Similar to MIT, STI Group operates in the semiconductor manufacturing equipment space of which some industries overlap with MIT’s.
Earlier this year, STI Group was also in discussions with another Chinese party, China Fortune-Tech Capital Co., regarding a similar disposal.
"We are not surprised if MIT should be approached by similar parties in the future," says Leow.
MIT has a market capitalisation of $58 million compared to net cash plus investment property of $29 million. On an ex-cash basis, MIT would be trading at a bargain ex-cash consensus PE of only 7.1x for FY17.
"We note that the company may reinstate dividends should it remain profitable in for 2HFY17," adds Leow.
As of 10.23am, shares in MIT are trading at 26 cents.
