ISDN Holdings - CGS-CIMB Research 2021-07-28: Positive Profit Alert ~ More Than 50% Growth

ISDN HOLDINGS LIMITED (SGX:I07) | SGinvestors.io ISDN HOLDINGS LIMITED (SGX:I07)

ISDN Holdings - Positive Profit Alert ~ More Than 50% Growth

  • ISDN has issued a positive profit alert guiding that 1H21 profit after tax (PAT) will grow more than 50% y-o-y driven by its industrial automation business.
  • At a minimum 50% y-o-y growth, ISDN's 1H21 PAT will form 59.4% of our FY21F forecast, better than FY20’s 45.0% achievement ratio.
  • Reiterate ADD. We expect ISDN to report 1H21 results in the week of 9 Aug 21.



ISDN issued positive profit alert

  • ISDN (SGX:I07) has issued a positive profit alert. See ISDN's announcements.
  • ISDN expects 1H21 PAT to grow more than 50% y-o-y based on its preliminary review of the unaudited financial results. The strong performance is driven by continued growth from its core industrial automation business.
  • In FY20, ISDN also issued a positive profit alert on 28 Jul 20, guiding that 1H20 net profit was expected to grow by more than 50% y-o-y. On 7 Aug 20, ISDN released its 1H20 results whereby net profit grew by 72.5% y-o-y.


2Q21 profit expectations

  • Assuming a minimum 50% y-o-y PAT growth, ISDN's 1H21F PAT will reach a minimum of S$19.3m, forming 59.4% of our FY21F PAT forecast. This will be a stronger performance compared to last year. In FY20, 1H20 PAT formed 45.0% of the full-year performance (excluding exceptional items).
  • Based on 1H19 and 1H20 profit distributions between shareholders of the company and minority interests, ISDN's 2Q21 net profit could range between S$6.8m and S$8.3m, or 5-28% y-o-y growth.


Yasakawa confirms strong industry outlook

  • Yasakawa Electric Corporation (6506 JP), a supplier to ISDN, similarly reported (on 9 Jul 21) strong results; its 1QFY3/22 revenue growth was 31.1% y-o-y.
  • Yasakawa also confirmed strong demand for motion control and robotics products, leading the company to raise its FY22F revenue forecast by 7.0%.

Reiterate ADD on ISDN






William TNG CFA CGS-CIMB Research | https://www.cgs-cimb.com 2021-07-28
SGX Stock Analyst Report ADD MAINTAIN ADD 0.844 SAME 0.844



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