SG Tech Manufacturing Services Sector - CIMB Research 2018-01-09: Unearthing The Laggards

Tech Manufacturing Services - CIMB Research 2018-01-09: Unearthing The Laggards Singapore Technology Manufacturing Stocks AEM HOLDINGS LTD AWX.SI SUNNINGDALE TECH LTD BHQ.SI MEMTECH INTERNATIONAL LTD BOL.SI

Tech Manufacturing Services - Unearthing The Laggards

Identifying the laggards 

  • In 2017, the seven small-cap tech manufacturing stocks under our coverage delivered average return of 162%. 
  • In this note, we highlight five non-rated with 2017 share price performance below the average return of the stocks under our coverage, and are net cash based on latest publicly-announced results. The non-rated stocks are:
    1. Avi-Tech Electronics Limited (+69.6%);
    2. Broadway Industrial Group (-34.2%);
    3. Fu Yu Corporation (+0.5%).
    4. InnoTek Holdings (+30.9%) and
    5. Manufacturing Integration Technology Ltd (+46.6%). 
  • Our top picks are AEM, Memtech and Sunningdale Tech.

AVI-TECH ELECTRONICS LIMITED (BKY.SI)  Avi-Tech Share Price  Avi-Tech Target Price  Avi-Tech Analyst Reports  Avi-Tech Corporate Actions  Avi-Tech Announcements  Avi-TechLatest News  Avi-Tech Blog Articles

  • Avi-Tech Electronics Limited (AVIT) offers burn-in and engineering services for customers in the semiconductor, electronics and life science industries. Its production/testing facilities are based in Singapore and its in-house burn-in test design capability helps reduce its capex needs. 
  • Autonomous driving/Internet of Things are seen as potential growth drivers by management. 
  • AVIT had a net cash balance sheet at end-Sep 2017. Dividend payout policy is 30%. AVIT trades at a FY6/17 P/E of 11.9x vs. regional peers’ average of 16.5x.
  • See report: AVI-Tech Electronics Ltd - CIMB Research 2018-01-09: Powering Into The Future

BROADWAY INDUSTRIAL GROUP LTD (B69.SI)  Broadway Industrial Group Share Price  Broadway Industrial Group Target Price  Broadway Industrial Group Analyst Reports  Broadway Industrial Group Corporate Actions  Broadway Industrial Group Announcements  Broadway Industrial GroupLatest News  Broadway Industrial Group Blog Articles

FU YU CORPORATION LTD (F13.SI)  Fu Yu Share Price  Fu Yu Target Price  Fu Yu Analyst Reports  Fu Yu Corporate Actions  Fu Yu Announcements  Fu YuLatest News  Fu Yu Blog Articles

  • Fu Yu Corporation is an established plastic injection moulding company. Key industries served by Fu Yu include printing and imaging, networking and communications, consumer, medical, automotive and power tools. 
  • The company has a net cash balance sheet at end-Sep 2017 and dividend payout policy of at least 50% of net profit.
  • See report: Fu Yu Corp Ltd - CIMB Research 2018-01-09: Plastic Injection Specialist

INNOTEK LIMITED (M14.SI)  InnoTek Share Price  InnoTek Target Price  InnoTek Analyst Reports  InnoTek Corporate Actions  InnoTek Announcements  InnoTekLatest News  InnoTek Blog Articles

  • InnoTek Holdings is a precision metal components manufacturer serving the consumer electronics, office automation and automotive industries. Its stamped components are used in printers and copiers, TVs and cars. Its end-customers include Sony, Canon, Ricoh, Continental, Imasen, Kiekert, Kyocera, Konka, Innolux and Wistron. 
  • Restructuring efforts over the past few years and a change in management has led to return to positive net profit) since 2Q16.
  • See report: Innotek Limited - CIMB Research 2018-01-09: Restructuring To Stay Ahead

MFG INTEGRATION TECHNOLOGY LTD (M11.SI)  Manufacturing Integration Technology Share Price  Manufacturing Integration Technology Target Price  Manufacturing Integration Technology Analyst Reports  Manufacturing Integration Technology Corporate Actions  Manufacturing Integration Technology Announcements  Manufacturing Integration TechnologyLatest News  Manufacturing Integration Technology Blog Articles

  • Manufacturing Integration Technology Ltd (MIT) is a capital goods supplier, primarily serving the semiconductor industry. Management believes that the company will benefit from the strong outlook for the global semiconductor industry. MIT has been announcing new order wins in the past 12 months.
  • MIT had a net cash balance sheet at end-Jun 2017 and has adopted a 25% dividend payout policy.
  • See report: Manufacturing Integration Technology Ltd - CIMB Research 2018-01-09: Winning Orders Again

Highlighted Companies 

AEM HOLDINGS LTD (AWX.SI)  AEM Holdings Share Price  AEM Holdings Target Price  AEM Holdings Analyst Reports  AEM Holdings Corporate Actions  AEM Holdings Announcements  AEM HoldingsLatest News  AEM Holdings Blog Articles

  • Rating: ADD, Target Price: S$4.55
  • AEM is currently the sole supplier of its key customer. AEM forecasts FY17F sales and pretax profit of at least S$215.0m and S$32.0m, respectively.

MEMTECH INTERNATIONAL LTD (BOL.SI)  Memtech International Share Price  Memtech International Target Price  Memtech International Analyst Reports  Memtech International Corporate Actions  Memtech International Announcements  Memtech InternationalLatest News  Memtech International Blog Articles

  • Rating: ADD, Target Price: S$1.33
  • Memtech International (MTEC) continues to see potential in its automotive business given the rise of opportunities with domestic auto manufacturers in China.

SUNNINGDALE TECH LTD (BHQ.SI)  Sunningdale Tech Share Price  Sunningdale Tech Target Price  Sunningdale Tech Analyst Reports  Sunningdale Tech Corporate Actions  Sunningdale Tech Announcements  Sunningdale TechLatest News  Sunningdale Tech Blog Articles

  • Rating: ADD, Target Price: S$2.79
  • Sunningdale Tech has finally seen the results of its cost reduction initiatives. The 9M17 gross margin rose to 15.0%. We believe margins will continue to improve, leading to a hike in our profit forecasts.

William TNG CFA CIMB Research | 2018-01-09
CIMB Research SGX Stock Analyst Report ADD Maintain ADD 4.550 Same 4.550
ADD Maintain ADD 2.790 Same 2.790
ADD Maintain ADD 1.330 Same 1.330