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Bigger in size, half the price - SAM (9822) SAM Engineering

Part 1 - https://klse.i3investor.com/blogs/buyandholdlt/2020-06-24-story-h1509587612-SAM_ENGINEERING_DON_T_SLEEP_ON_THIS.jsp

In my last post I compared RM1bn SAM Engineering to the RM2bn monster, UWC.

UWC is trading at a trailing PE of 41x, due to the promise of growth. This is nearly 4x of SAM’s current core PE of 11x.

However, if you dissect SAM’s quarterly results, their 4QFY20 revenue growth of 145% YoY is 3x more than UWC!!



I know you all like to compare size… Don’t worry… SAM also has the BIGGER PBT since one quarter ago. 



Stronger, bigger and faster, but PE is nearly 4x lower??

“The Group’s revenue for the current quarter was RM55.8 million, representing an increase of 45.7% as compared to RM38.3 million generated in the corresponding quarter in the previous year. The increase was mainly due to stronger demand from global customers in the semiconductor industry and life science industry.” – UWC latest quarterly result

Hmm… Where have I heard this before?

“On the other hand, the outlook for our Equipment business remains strong as we are supporting the essential products segment. Our semiconductor equipment customers continue to thrive, largely driven by increased demand from the medical, telecommunications and the electronics industries. Over the last 2 months, the Equipment division has been ramping up its production capacity to recover from previous mandated facility closures and support customers demand increase.” – SAM latest quarterly result

Judging from their market exposure (cloud computing, 5G, electric vehicle, artificial intelligence), this should be sustainable.



Their equipment customers are also not Kuchi rats. All of them are multi billion dollar companies, meaning there is potential for SAM to gain further business from them.

  Description
Revenue
Market cap
Agilent
Chemical analysis, life science, diagnostics
USD5bn
USD30b
3M
Industry, worker safety, health care, consumer
USD33bn
USD89bn
B Braun
Medical and pharmaceutical device
-
USD7bn
Teradyne
Test equipment
USD14bn
USD3bn
Ebara
Environmental and industrial machinery
USD2bn
USD5bn
KLA Tencor
Control and yield management for semiconductor industry
USD30bn
USD5bn
Bosch
Mobility, consumer good, industrial technology and energy and building
-
USD88bn