CGS-CIMB expects Genetec to record stronger y-o-y results in 2HFY23
KUALA LUMPUR (Nov 30): CGS-CIMB Securities has maintained its “Add” rating on Genetec Technology Bhd at RM2.61 with a higher target price (TP) of RM4.60 (from RM4.30) and said Genetec’s 1HFY3/23 net profit beat house expectations at 58% of FY23F core net profit due to stronger-than-expected net margin in 2QFY23, but in line with consensus.
In a note on Tuesday (Nov 29), the research house said it expects Genetec to record stronger y-o-y results in 2HFY23F, backed by its robust order book in EV & ES and favourable forex movements.
CGS-CIMB said Genetec’s order book stood at RM256.4 million as at end-Sep 2022, out of which 98% are related to the EV & ES segment.
“We gathered from the management that Genetec added circa RM79 million worth of new orders in the quarter mainly in the EV & ES segment, including a second formation line from its US EV customer.
“In addition, the group is also tendering for additional formation, regenerative braking system and electronic control unit (ECU) lines for FY3/24F,” it said.
The research house said Genetec’s tender book stood at circa RM237 million as of end-Sep 22.
“Moreover, we also learnt that Genetec is working on developing its in-house battery energy storage system (BESS) as part of its new growth strategy.
“The group plans to complete the BESS prototype by end-2022 and begin pilot run deployment in CY23F.
“We raise FY23-25F EPS by 3-7%. Reiterate Add with a higher RM4.60 TP,” it said.
http://www.theedgemarkets.com/article/cgscimb-expects-genetec-record-stronger-yoy-results-2hfy23f
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