KUALA LUMPUR (Aug 19): Shares of SFP Tech Holdings Bhd (KL:SFPTECH) surged on Monday to their highest in nearly a month as analysts expect a record year for the engineering support services firm following its latest quarterly results.
SFP Tech climbed as much as nine sen or 14% to 75.5 sen, its highest since July 23, 2024. The stock ended the day at 72 sen, valuing the company at RM1.73 billion. More than 16.79 million shares changed hands, more than quadruple the trading volume’s 200-day moving average.
The company is “on track to register back-to-back record high profits annually” until 2026, driven by the newly acquired ST Exhibit Automation Sdn Bhd, completion of a new manufacturing plant, and new equipment to boost earnings, said Hong Leong Investment Bank.
Hong Leong Investment Bank — one of only two research houses covering SFP Tech — upgraded the stock to ‘buy’ from ‘neutral’ with an unchanged target price of 81 sen. The research house is also forecasting a core net profit of RM41.2 million, or 1.7 sen per share, for this year.
Monday’s gain helped to cut year-to-date decline of SFP Tech shares to 25% after several sets of weaker-than-expected quarterly results.
Nevertheless, SFP Tech could be “on the brink of a new dawn”, said UOB Kay Hian, which also rates the stock a ‘buy’ with a target price of 98 sen.
A semiconductor upcycle is spurring the front-end semiconductor demand, and “we believe there could be more traction in the upcoming order book loadings”, the research house flagged. UOB Kay Hian is forecasting a net profit of RM45.1 million for 2024.
SFP Tech, listed in June 2022, specialises in factory automation and assembly services for the semiconductor, solar, and electronics industries. The company also provides sheet metal fabrication and precision micro machining.
On Friday, the company reported net profit of RM12.89 million for the three months ended June 30, 2024 (2QFY2024) compared with RM10.63 million a year earlier, while revenue rose 24.56% to RM45.39 million from RM36.44 million
For the first half ended June 30, 2024, SFP Tech’s net profit increased 5.97% to RM21.97 million from RM20.73 million in the previous year's January-June period, while revenue grew 11.31% to RM79.09 million from RM71.05 million.