SAM Engineering

[winston]

not vested

Maybank IB joins coverage of SAM Engineering with counter-consensus ‘buy’ call

By Jason Ng

Cyclical recovery of the aerospace and semiconductor sectors.

Earnings at SAM Engineering, a contract manufacturer that makes aircraft parts and electronic components, will likely grow 20% on average annually over three years.

Net profit surged 53% in the third quarter ended Dec 31, 2023 to RM29.32 million from RM19.19 million over the same period a year earlier,

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/710400

[winston]

not vested

4QFY24: Transcends expectations
Strong beat in 4QFY24; maintain BUY @ MYR6.85 TP

SAMEE’s 4QFY24 results was a strong beat with reference to our initiation report on 3 May (link).

Hence, we lift our FY25/26E earnings forecasts by 14%/5% respectively to account for:
i) higher aerospace revenues; and
ii) higher PBT margin assumption for both aerospace and equipment segments.

We raise our TP to MYR6.85 (from MYR6.05) – based on 32.7x (from 31x) PER on CY25E EPS, which is at +1.5SD to its 5-year mean.

SAMEE is a secular growth stock and is one of our tech sector’s top picks.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/384340.pdf

[winston]

not vested

1Q Results

Revenue: +8%; RM 333m
EPS: -60%; 1.49; RM 10m
Net Asset: 2.10

https://www.bursamalaysia.com/market_in ... id=3479637

[winston]

not vested

Sep 02. 2024

SAM Engineering shares log worst day in 30 months as Boeing, Airbus troubles drag

By Jason Ng

“We expect SAM’s earnings blip to continue into” 2QFY2025 due to “hiccups in its aerospace segment and the sharp fluctuation” in exchange rate, said Maybank Investment Bank (Maybank IB).

Aerospace segment appears to have suffered temporary setback from a delay in new product launch that temporarily halted delivery, as well as quality defects from materials procured by suppliers.

“While the group’s Thailand expansion will take time before breaking-even, we are encouraged by the narrowing losses in each subsequent quarter,”.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/725133

[winston]

not vested

Sep 01, 2024

Results below; maintain BUY @ MYR6.15 TP

SAM’s 1QFY25 results came in below expectations.

We reduce FY25-27E earnings by -15%/-15%/-8% to account for:
i) lower aerospace segment’s revenues and margins; and
ii) lower growth rates for its equipment segment as industry checks have guided to a delay in the recovery of the semiconductor supply chain to 2HCY25E (from 1HCY25E).

Hence, our TP is also reduced to MYR6.15 (-70sen) based on unchanged 32.7x PER (5Y mean) on rolled over FY26E EPS.

SAM is one of our tech sector’s top BUYs.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/403270.pdf

[winston]

Expecting sequential quarterly improvements

Lowering FY25-27E earnings; maintain BUY

We cut FY25E EPS by 19% to account for:
i) lower aerospace revenue and margins as we factor in a gradual improvement from 2QFY25E after impacted by raw material shortages and material quality defects from a supplier; and
ii) a higher group effective tax rate.

We also trim FY26-27E EPS by 7%/6% to account for a slower ramp up of its RJ2 + BB1 plants due to delay in the semiconductor sector recovery.

Consequently, our new TP is MYR5.71 (previously MYR6.15), based on unchanged 32.7x PER (approx. +1SD of 5Y mean) on FY26E EPS. Maintain BUY.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/409861.pdf

[winston]

not vested

ESG 2.0: Slightly below average scoring

Slightly below average ESG score

We analysed SAMEE’s ESG disclosures post release of its FY24 Annual and Corporate Governance Reports and have assigned an ESG score of 44 (out of 100) based on our proprietary ESG scoring methodology.

At 44, this makes its ESG scoring slightly below average.

We maintain a BUY on SAMEE with an unchanged TP of MYR5.71, based on 32.7x FY26E PER (c. +1SD of 5Y mean).

We believe that SAMEE is well positioned to capitalise on the cyclical recovery of both aerospace and front-end semiconductor sectors.

Source: Maybank

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://mkefactsettd.maybank-ke.com/PDFS/413600.pdf