Jadason Enterprises Limited - CGS-CIMB Research 2019-08-15: Outlook Remains Challenging

JADASON ENTERPRISES LTD (SGX:J03) | SGinvestors.io JADASON ENTERPRISES LTD (SGX:J03)

Jadason Enterprises Limited - Outlook Remains Challenging

  • JADASON ENTERPRISES LTD (SGX:J03) reported a net loss of S$1.8m for 2Q19. 1H19 net loss of S$3.3m formed 55% of our full-year net loss forecast.
  • The loss was mainly due to a decline PCB drilling segment sales.
  • The company continues to guide for a challenging 2H given the trade tensions between China and the US, which affects Jadason’s end customers.
  • Maintain ADD and Target Price of S$0.059.



1H19 deemed in line

  • We deem Jadason's 1H19 loss of S$3.3m (55% of our full-year net loss forecast) in line. We expect 2H19 to remain challenging for Jadason.
  • Including cash and bills receivables, Jadason remains in a net cash position.
  • Cash flow generation remained healthy despite the losses. In 2Q19, net cash from operations was S$2.8m, while in 1H19, net cash from operations was S$1.2m.
  • No interim dividend was declared.


Expecting a challenging 2H

  • The trade conflict between China and the US continues to have a negative impact on Jadason’s customers, leading to lower demand for its PCB drilling service. Although 5G roll-out in China may stimulate demand, the pace of the roll-out is now uncertain given the adverse business environment.


Maintain ADD

  • Our Target Price remains set at its FY19 BVPS of S$0.059.
  • Risks include further order declines.
  • Potential re-rating catalysts are resolution of the trade war and stronger-than-expected orders, especially for 5G mobile services.





William TNG CFA CGS-CIMB Research | https://research.itradecimb.com/ 2019-08-15
SGX Stock Analyst Report ADD MAINTAIN ADD 0.059 SAME 0.059



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