NANOFILM TECHNOLOGIES INTL LTD (SGX:MZH)
Nanofilm Technologies - 1Q22 Revenue In Line; Positive Outlook Despite Macro Challenges
- NanoFilm's 1Q22 revenue growth of 27% y-o-y was largely in line with our estimate of 30% y-o-y growth for 2022. AMBU, the largest segment, contributed 81% of revenue in 1Q22, with 3C products contributing 63%.
- NanoFilm highlighted that the market has returned to operating in a normalised cycle with the easing of supply chain disruptions. Despite several macro challenges, NanoFilm is positive and confident of 2022.
Nanofilm's 1Q22 results in-line with healthy y-o-y revenue growth.
- NanoFilm Technologies International (SGX:MZH) reported 1Q22 revenue growth of 27% y-o-y, largely in line with our 30% y-o-y growth estimate for 2022.
- All business units performing well and gaining traction. The largest segment, Advanced Materials Business Unit (AMBU) contributed 81% of revenue in 1Q22, with 3C products contributing 63%. The growth is driven by communications and wearables as well as accessories, as the market returned to operating in a normalised cycle with the easing of supply chain disruptions. The other segments also grew mainly from the automobile segment.
- NanoFilm is also seeing positive developments including fuel injection system, battery connectors and other car parts. In addition, the precision engineering and printing & imaging segments recorded growth in demand from the printing imaging, precision engineering tooling and biomedical testing components.
- On the other hand, Sydrogen's production line has been qualified and on track for pilot production and maiden revenue contribution in 2H22. Also, it has commenced pilot production of coating services.
Nanofilm is positive and confident of 2022.
- Despite several macro challenges, NanoFilm is positive and systems to reduce labour requirements.
R&D efforts in new exciting areas are intensifying with pathways to commercialisation.
- These areas cover multiple transformational fields in:
- new classes of advanced materials through greener and sustainable composites,
- engineered optics for virtual reality and augmented reality to revolutionise the manner in which a person interacts with the world, and
- hydrogen fuel cell technologies and components to enable decarbonisation energy transition through hydrogen.
- In its first year of operation, Sydrogen recognised a net loss of S$1m in FY21 related to operating expenses incurred in building its business fundamentals. Sydrogen will continue to establish its foundation for technology and production capacity, and is on track to recognise initial revenue in an automobile project in 2HFY22.
Nanofilm Technologies - Earnings forecast and recommendation
- We maintain our earnings forecasts for NanoFilm. Our earnings estimates indicate y-o-y earnings vs NanoFilm’s peers’ 25x 2022F P/E.
- See
- Share price catalysts:
- Better-than-expected ramp-up of the nanofabrication business.
- New application in the advanced material segment such as automobile (bi-polar plate electrodes in fuel cells) and fast-moving consumer goods.
John Cheong
UOB Kay Hian Research
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https://research.uobkayhian.com/
2022-04-21
SGX Stock
Analyst Report
2.720
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2.720
