Sarine Technologies - Maybank Kim Eng 2021-08-05: Shining Bright; Best 1H21 Since 2014

SARINE TECHNOLOGIES LTD (SGX:U77) | SGinvestors.io SARINE TECHNOLOGIES LTD (SGX:U77)

Sarine Technologies - Shining Bright; Best 1H21 Since 2014

  • Sarine Technologies (SGX:U77)'s 1H21 PAT exceeded our and street’s full year estimates, surging by 972.4% y-o-y to US$12.6m. This was driven by the recovery of manufacturing activities amid robust demand for diamond jewellery after the reopening of retail activities in key global markets.
  • In line with the strong earnings, Sarine Technologies has declared an interim dividend of US$0.015, comprising a US$0.01 and US$0.005 special dividend.
  • We roll forward our valuation to FY22E, and raised our DCF-based target price for Sarine Technologies to S$0.94 (LTG:3%, COE: 8.6%). Maintain BUY.



Buoyant industry conditions drive topline growth

  • Sarine Technologies's revenue jumped 60.5% y-o-y to US$36m due to higher capital equipment sales (12/36 Galaxy® family systems were delivered in 1Q/2Q21) and > 80% increase in recurring revenues from Galaxy® inclusion scanning. Its new business comprising rough & polished diamond wholesale and retail related revenues was just < 6% of turnover but we expect this segment to continue growing with broader commercial adoption.
  • Total recurrent revenues now account for ~40% of Sarine Technologies’s topline, as compared to 35% a year ago.


Raises earnings forecasts on better operating leverage



e-Grading on track to roll out by end-2021






Eric Ong Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-08-05
SGX Stock Analyst Report BUY MAINTAIN BUY 0.94 UP 0.700



Advertisement



MOST TALKED ABOUT STOCKS / REITS OF THE WEEK



loading.......



ANALYSTS SAY


loading.......