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1661-1680 of 1693
Target raise from $1.02 to $1.28
Nanofilm Technologies International (NANO SP)
2022: Results Miss Expectations Challenging Near-term Outlook
Nanofilm&rsquo s 2022 earnings of S$44m (-30% yoy) missed our estimate by 16% due to a
challenging operating environment. It faces a challenging outlook in 2023 as the macro
environment remains tough with inflationary pressures and rising interest rates.
Nanofilm&rsquo s China operations are expected to remain soft in 1Q23, and should see a
gradual recovery only in 2H23. We raise our target price by 25% to S$1.28 (18x 2023F
PE). Upgrade to HOLD as the challenges appear to be lesser in 2023.
2022 RESULTS
Year to 31 Dec (S$m) 2022 2021 yoy % chg
Revenue 237.4 246.7 -3.8
Adjusted EBITDA 80.5 95.7 -15.9
Profit after tax (PAT) 43.3 62.5 -30.8
PAT margins (%) 18.2 25.3 (7.1ppt)
PATMI 43.8 62.2 -29.6
Source: Nanofilm, UOB Kay Hian
RESULTS
&bull Results below expectations due to multiple challenges. Nanofilm Technologies
International&rsquo s (Nanofilm) reported adjusted PATMI of S$44m (-30 % yoy) missed our
expectation by 16%. Nanofilm had earlier issued a profit warning and warned of a weak
performance, so this does not come as a major surprise. Five reasons were highlighted for
the weaker 2022 earnings (-30% yoy) and revenue which fell 4% yoy: a) challenging
operating environment from macro headwinds, b) higher expansion costs for future growth,
c) disruptions faced by a key final assembly supplier of its major customer, d) China' s quick
reopening in Dec 22 which has caused a spike in infections, and e) softer end-consumer
demand due to recessionary fears.
&bull Two BUs were down, with NFBU being the only bright spot. Nanofilm&rsquo s largest segment,
Advanced Materials Business Unit (AMBU), recorded a 4% yoy decline in revenue and
contributed 79% of revenue in 2022, with 3C products contributing around 75%. On the other
hand, Industrial Equipment Business Unit&rsquo s (IEBU) revenue fell 31% yoy as the macro
uncertainties and weak foreign currencies resulted in customers delaying their capex
spending. The Nanofabrication Business Unit (NFBU) was the only segment to record a
revenue growth (+145% yoy) as it benefitted from continued ramp-up of mass production
projects.
&bull Nanofilm faces a challenging outlook in 2023. This is due to the tough macro
environment with geopolitical tensions, inflationary pressures and rising interest rates.
China&rsquo s 1Q23 outlook remains soft and Nanofilm expects a gradual recovery in its China
operations in 2H23. However, it is optimistic about the longer-term outlook as some
productions of new projects are expected to contribute meaningfully in 2024 onwards.
KEY FINANCIALS
Year to 31 Dec (S$m) 2021 2022 2023F 2024F 2025F
Net turnover 247 237 253 359 497
EBITDA 94 77 85 117 120
Operating profit 68 46 56 86 120
Net profit (rep./act.) 62 44 47 72 100
Net profit (adj.) 62 44 47 72 100
EPS (S$ cent) 9.4 6.6 7.1 10.9 15.2
PE (x) 15.0 21.2 19.8 12.9 9.3
P/B (x) 2.2 2.2 2.0 1.8 1.6
EV/EBITDA (x) 8.7 10.7 9.7 7.0 6.9
Dividend yield (%) 1.4 0.9 1.0 1.6 2.2
Net margin (%) 25.2 18.5 18.5 20.1 20.2
Net debt/(cash) to equity (%) (34.5) (29.0) (32.8) (31.8) (32.7)
Interest cover (x) n.a. n.a. n.a. n.a. n.a.
ROE (%) 14.5 10.3 10.7 14.9 18.1
Consensus net profit - - 61 76 193
UOBKH/Consensus (x) - - 0.77 0.95 0.52
Source: Nanofilm, Bloomberg, UOB Kay Hian
R e t a i l M a r k e t M o n i t o r T h u r s d a y , 2 3 F e b r u a r y 2 0 2 3
w w w . u t r a d e . c o m . s g 7
S I N G A P O R E
H O N G K O N G
STOCK IMPACT
&bull Focused on executing strategies for each BU. For AMBU, Nanofilm continues to be the
leading solution provider for key customers in existing businesses, and is involved in the
rollout of new products. It will focus on markets with high scaling potential. For NFBU, it
continues to move up the value chain for its sensory lens or Micro Lens Array project for
smart devices. Nanofilm is also involved in multiple new projects with new and existing
customers for different products under New Product Introductions or initial production builds.
If successful, these new projects will lead to mass production from 2024 onwards at the new
Vietnam site. For IEBU, Nanofilm has been extending its portfolio of large inline coating
systems for high volume production to support the growth of internal BUs. At the same time,
IEBU is rolling out new product lines for external markets.
&bull Sydrogen has commenced coating services for Bipolar Plates (BPP). In terms of
component sales, it is in the final testing stages before the expected mass production
commences in Shanghai in 2H23. Sydrogen continues to receive encouraging market
feedback on the strong technical performance of its coated BPP. The ability to offer a
differentiated coating solution for this critical BPP component in a fuel cell system, positions
Sydrogen well in realising its product roadmap towards system solutions.
EARNINGS REVISION/RISK
&bull We have reduced our earnings forecasts for 2023/24 by 24%/4% after reducing our revenue
forecasts by 13%/1% to factor in the potential slowdown in end-consumer demand amid a
challenging macro environment with geopolitical tensions, inflationary pressures and rising
interest rates. Our revised earnings estimates indicate yoy earnings growths of 7%/54% for
2023/24.
VALUATION/RECOMMENDATION
&bull Upgrade to HOLD with a 25% higher target price of S$1.28. We value Nanofilm based on
18x 2023F EPS, pegged to -1SD of its long-term forward mean to reflect the challenging
environment it is facing, which could lead to further de-rating of its PE multiple. Previously,
we valued Nanofilm based on 11x 2023F EPS, or -2SD of its long-term forward mean. The
increase in our valuation multiple is due to a less challenging outlook for 2023, compared to
2022 when earnings fell significantly due to multiple challenges. Nanofilm&rsquo s 2023F PE of 20x
is at a premium vs Singapore peers, which are trading at 2023F PE of 9x.
SHARE PRICE CATALYST
&bull Better-than-expected ramp-up of the nanofabrication business.
&bull New application in the advanced material segment such as electric vehicles, bi-polar plate
electrodes in fuel cells and solar energy.
PEER COMPARISON
Price @ Market ------------------- PE ------------------ 3-yr EPS P/B Yield ROE Net Net Margin
Company Ticker 22 Feb 23 C
Nanofilm Technologies International (NANO SP)
2022: Results Miss Expectations Challenging Near-term Outlook
Nanofilm&rsquo s 2022 earnings of S$44m (-30% yoy) missed our estimate by 16% due to a
challenging operating environment. It faces a challenging outlook in 2023 as the macro
environment remains tough with inflationary pressures and rising interest rates.
Nanofilm&rsquo s China operations are expected to remain soft in 1Q23, and should see a
gradual recovery only in 2H23. We raise our target price by 25% to S$1.28 (18x 2023F
PE). Upgrade to HOLD as the challenges appear to be lesser in 2023.
2022 RESULTS
Year to 31 Dec (S$m) 2022 2021 yoy % chg
Revenue 237.4 246.7 -3.8
Adjusted EBITDA 80.5 95.7 -15.9
Profit after tax (PAT) 43.3 62.5 -30.8
PAT margins (%) 18.2 25.3 (7.1ppt)
PATMI 43.8 62.2 -29.6
Source: Nanofilm, UOB Kay Hian
RESULTS
&bull Results below expectations due to multiple challenges. Nanofilm Technologies
International&rsquo s (Nanofilm) reported adjusted PATMI of S$44m (-30 % yoy) missed our
expectation by 16%. Nanofilm had earlier issued a profit warning and warned of a weak
performance, so this does not come as a major surprise. Five reasons were highlighted for
the weaker 2022 earnings (-30% yoy) and revenue which fell 4% yoy: a) challenging
operating environment from macro headwinds, b) higher expansion costs for future growth,
c) disruptions faced by a key final assembly supplier of its major customer, d) China' s quick
reopening in Dec 22 which has caused a spike in infections, and e) softer end-consumer
demand due to recessionary fears.
&bull Two BUs were down, with NFBU being the only bright spot. Nanofilm&rsquo s largest segment,
Advanced Materials Business Unit (AMBU), recorded a 4% yoy decline in revenue and
contributed 79% of revenue in 2022, with 3C products contributing around 75%. On the other
hand, Industrial Equipment Business Unit&rsquo s (IEBU) revenue fell 31% yoy as the macro
uncertainties and weak foreign currencies resulted in customers delaying their capex
spending. The Nanofabrication Business Unit (NFBU) was the only segment to record a
revenue growth (+145% yoy) as it benefitted from continued ramp-up of mass production
projects.
&bull Nanofilm faces a challenging outlook in 2023. This is due to the tough macro
environment with geopolitical tensions, inflationary pressures and rising interest rates.
China&rsquo s 1Q23 outlook remains soft and Nanofilm expects a gradual recovery in its China
operations in 2H23. However, it is optimistic about the longer-term outlook as some
productions of new projects are expected to contribute meaningfully in 2024 onwards.
KEY FINANCIALS
Year to 31 Dec (S$m) 2021 2022 2023F 2024F 2025F
Net turnover 247 237 253 359 497
EBITDA 94 77 85 117 120
Operating profit 68 46 56 86 120
Net profit (rep./act.) 62 44 47 72 100
Net profit (adj.) 62 44 47 72 100
EPS (S$ cent) 9.4 6.6 7.1 10.9 15.2
PE (x) 15.0 21.2 19.8 12.9 9.3
P/B (x) 2.2 2.2 2.0 1.8 1.6
EV/EBITDA (x) 8.7 10.7 9.7 7.0 6.9
Dividend yield (%) 1.4 0.9 1.0 1.6 2.2
Net margin (%) 25.2 18.5 18.5 20.1 20.2
Net debt/(cash) to equity (%) (34.5) (29.0) (32.8) (31.8) (32.7)
Interest cover (x) n.a. n.a. n.a. n.a. n.a.
ROE (%) 14.5 10.3 10.7 14.9 18.1
Consensus net profit - - 61 76 193
UOBKH/Consensus (x) - - 0.77 0.95 0.52
Source: Nanofilm, Bloomberg, UOB Kay Hian
w w w . u t r a d e . c o m . s g 7
S I N G A P O R E
H O N G K O N G
STOCK IMPACT
&bull Focused on executing strategies for each BU. For AMBU, Nanofilm continues to be the
leading solution provider for key customers in existing businesses, and is involved in the
rollout of new products. It will focus on markets with high scaling potential. For NFBU, it
continues to move up the value chain for its sensory lens or Micro Lens Array project for
smart devices. Nanofilm is also involved in multiple new projects with new and existing
customers for different products under New Product Introductions or initial production builds.
If successful, these new projects will lead to mass production from 2024 onwards at the new
Vietnam site. For IEBU, Nanofilm has been extending its portfolio of large inline coating
systems for high volume production to support the growth of internal BUs. At the same time,
IEBU is rolling out new product lines for external markets.
&bull Sydrogen has commenced coating services for Bipolar Plates (BPP). In terms of
component sales, it is in the final testing stages before the expected mass production
commences in Shanghai in 2H23. Sydrogen continues to receive encouraging market
feedback on the strong technical performance of its coated BPP. The ability to offer a
differentiated coating solution for this critical BPP component in a fuel cell system, positions
Sydrogen well in realising its product roadmap towards system solutions.
EARNINGS REVISION/RISK
&bull We have reduced our earnings forecasts for 2023/24 by 24%/4% after reducing our revenue
forecasts by 13%/1% to factor in the potential slowdown in end-consumer demand amid a
challenging macro environment with geopolitical tensions, inflationary pressures and rising
interest rates. Our revised earnings estimates indicate yoy earnings growths of 7%/54% for
2023/24.
VALUATION/RECOMMENDATION
&bull Upgrade to HOLD with a 25% higher target price of S$1.28. We value Nanofilm based on
18x 2023F EPS, pegged to -1SD of its long-term forward mean to reflect the challenging
environment it is facing, which could lead to further de-rating of its PE multiple. Previously,
we valued Nanofilm based on 11x 2023F EPS, or -2SD of its long-term forward mean. The
increase in our valuation multiple is due to a less challenging outlook for 2023, compared to
2022 when earnings fell significantly due to multiple challenges. Nanofilm&rsquo s 2023F PE of 20x
is at a premium vs Singapore peers, which are trading at 2023F PE of 9x.
SHARE PRICE CATALYST
&bull Better-than-expected ramp-up of the nanofabrication business.
&bull New application in the advanced material segment such as electric vehicles, bi-polar plate
electrodes in fuel cells and solar energy.
PEER COMPARISON
Price @ Market ------------------- PE ------------------ 3-yr EPS P/B Yield ROE Net Net Margin
Company Ticker 22 Feb 23 C
U think share price can go back up to $1.75? Cover a gap along the way.
msksmsks ( Date: 23-Feb-2023 09:54) Posted:
|
Sellers are there to scalp the mkt.
Not genuine selling
Lets see whther the buyers can take them on and overrun later
Not genuine selling
Lets see whther the buyers can take them on and overrun later
Longing or shorting no diff
But long, u hv few days.grace .
If short, hv to cover intra.day
Unless u hv yr own scripts
Or using CFD or SBL
If no scripts and leave.open
Short positions, subject to
SGX buyin.
As long make $$$, one is entitled
To use whatever suitable for them
But long, u hv few days.grace .
If short, hv to cover intra.day
Unless u hv yr own scripts
Or using CFD or SBL
If no scripts and leave.open
Short positions, subject to
SGX buyin.
As long make $$$, one is entitled
To use whatever suitable for them
lifeisgood ( Date: 22-Feb-2023 16:13) Posted:
|
Is it like people if no money to buy, so they short instead?
msksmsks ( Date: 22-Feb-2023 16:08) Posted:
|
I don't know why.either
Not my $$$...peoples choice
But shorting wrong price at wrong timing
May kena jialat jialat so i wuld discourage
Not my $$$...peoples choice
But shorting wrong price at wrong timing
May kena jialat jialat so i wuld discourage
lifeisgood ( Date: 22-Feb-2023 15:54) Posted:
|
I dont understand why people like to short. Even for good stocks. Is it like a favourite national past time?
msksmsks ( Date: 22-Feb-2023 15:30) Posted:
|
At this level to short ...too risky..
How many bids u can cover...
Once short covering in progress later,
U may end up buying higher
Good luck
How many bids u can cover...
Once short covering in progress later,
U may end up buying higher
Good luck
BB distributing.Short some now together with AEM
Buy on dips .
Bght some more 1.41-42
Not an inducement . Dydd
Bght some more 1.41-42
Not an inducement . Dydd
Not forgetting that Company share buyback and directors share purchase can resume after earnings release.
I suspect should have analysts upgrades. Otherwise wont rise so sharply
Current macro market weakness is due to rising US interest rates, which will affect the not-profitable tech companies very badly as it will be very costly for them to raise funds if they need to (and venture capital also disappearing fast).
However, Nanofilm is very profitable, and net cash, no borrowings. So no need to worry, as long as the company continues to perform according to its profitable growth plan. I am waiting for its earlier than 2025 profita target of $100 million.
Current macro market weakness is due to rising US interest rates, which will affect the not-profitable tech companies very badly as it will be very costly for them to raise funds if they need to (and venture capital also disappearing fast).
However, Nanofilm is very profitable, and net cash, no borrowings. So no need to worry, as long as the company continues to perform according to its profitable growth plan. I am waiting for its earlier than 2025 profita target of $100 million.
SmallSmall ( Date: 22-Feb-2023 09:52) Posted:
|
Any analyst Upgrades / Downgrades ?
As expected, raised dividend, to be paid out in May. Well done Nanofilm!
msksmsks ( Date: 22-Feb-2023 09:15) Posted:
|
Sellers stacking 1.36 to scare the steadfast buyers
Reckon that the buying wl overrun the sellers and push price higher
Reckon that the buying wl overrun the sellers and push price higher
FY22 result in line with mgmt profit guidance 2 wks ago which deem resilient considering the severity of the lockdown, restrictive measures and the supply chain disruption .
Propose 0.011 final dividend which is higher than last year
Strong cash flow with zero debt
Expansion in various locations (China , Vietnam, Japan)
Commercialising cutting edge solutions for mass roll out
Target $500mil (Revenue) & $100mil (Profit) for Fy25
1H23 likely a recovery phase and 2H23 wl be the trajectory Twds the next growth path.
Collectively, compelling risk/reward for an underappreciated catalyst with the potential
to drive a major new leg of growth
Cheers
Propose 0.011 final dividend which is higher than last year
Strong cash flow with zero debt
Expansion in various locations (China , Vietnam, Japan)
Commercialising cutting edge solutions for mass roll out
Target $500mil (Revenue) & $100mil (Profit) for Fy25
1H23 likely a recovery phase and 2H23 wl be the trajectory Twds the next growth path.
Collectively, compelling risk/reward for an underappreciated catalyst with the potential
to drive a major new leg of growth
Cheers
FY2022 RESULTS News Release -
https://links.sgx.com/1.0.0/corporate-announcements/OQ8PTT07MIITTWEN/747221_Nanofilm%20FY2022%20News%20Release.pdf
https://links.sgx.com/1.0.0/corporate-announcements/OQ8PTT07MIITTWEN/747221_Nanofilm%20FY2022%20News%20Release.pdf
Actually at this very low price , and with great prospects, Temasek and Credit Suisse, AIA should add to their exisiting holdings.
msksmsks ( Date: 21-Feb-2023 13:29) Posted:
|
U wanna grow big, u need to.expand
All big corpn go thru tat. It's inevitable . Some goes well and.some flop.
Dr xu and his related parties holding more than 50% thus he's committed and continue to steer the strategic direction on the technological front.
Opined that.the JV with Temasek wl drive their earnings higher once it's successfully took off
Cheers
All big corpn go thru tat. It's inevitable . Some goes well and.some flop.
Dr xu and his related parties holding more than 50% thus he's committed and continue to steer the strategic direction on the technological front.
Opined that.the JV with Temasek wl drive their earnings higher once it's successfully took off
Cheers
I like the future growth prospects of Nanofilm. It is going through growing pains now. But it will pass.