Earnings for the year was $7 million, down 21% y-o-y, dragged by $4.5 million in unrealised, noncash foreign exchange revaluation losses from its hydropower business in Indonesia. Excluding which, core profit for the year was up 26% y-o-y.
Even so, ISDN wants to grow its renewable energy business, with two additional mini hydropower plants scheduled for completion in 2026.
According to Tng, ISDN continues to see broad-based demand for its IA business as factories continue to enhance their capabilities via advanced IA solutions.
The company has also expanded its presence across Asia to capture emerging opportunities from Malaysia and Taiwan amid ongoing global supply chain diversification, he says.
Tng's higher target price of 96 cents is based on 24x FY2027 earnings, which is 1 sd. above its 10-year average of between FY2017 to FY2026. His earlier target price was based on an earnings multiple of 13.5x, the company's ten-year average between FY2016 to FY2025.
Besides earnings growth seen to resume in FY2026 to FY2028, Tng believes that this counter will also draw buying interest from Equity Market Development Programme (EQDP) funds.
Re-rating catalysts include higher-than-expected net profit contribution from its hydropower business segment, a faster pace of economic growth in China as it stimulates its economy, and a stronger global semiconductor recovery.
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On the other hand, downside risks include weak customer demand if the global economy continues to slow, and potential bad debts as economic conditions worsen.
ISDN shares, as at 11.41 am, changed hands at 61 cents, up 26.04%.
