BUSINESS

AMINVESTMENT BANK EXPECTS PENTAMASTER TO ACHIEVE 14 PER CENT CAGR FROM FY19–FY22

31/03/2020 01:58 PM

KUALA LUMPUR, March 31 -- AmInvestment Bank has projected that Pentamaster Corporation Bhd would achieve an impressive profit compounded annual growth rate (CAGR) of 14 per cent from the financial years 2019 until 2022 (FY19–FY22).

The company is riding on the growth of both its automated testing equipment (ATE) and factory automated solutions segments, the research house said in a note today.

"We like Pentamaster due to its positive growth prospects, supported by demand for more smart sensors in devices, the upcoming 3D sensing technology wave, trend towards autonomous cars and electric vehicles, and the adoption of Industry 4.0.

"We initiate coverage on Pentamaster with a 'Buy' call and a fair value of RM4.45/share, which is pegged to an FY21F price-to-earning (PE) of 19 times, in line with its peer local equipment makers’ average forward PE,” it added.

According to Pentamaster, test handlers account for 10–12 per cent of the back-end ATE market.

AmInvestment Bank believes that Pentamaster’s medium-term prospects remain positive, despite expectations that its first quarter of financial year 2020 would be impacted by COVID-19 as the group anticipates a V-shaped recovery in subsequent quarters based on its current order visibility.

"Its order book stood at RM200 million as at Dec 31, 2019, which was lower than what it was before due to customers’ shorter lead times," the research house said.

At lunch break, Pentamaster rose 16 sen to RM3.92 with 2.21 million shares transacted.

-- BERNAMA

 

 


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