KUALA LUMPUR (Dec 13): Shares of JF Technology Bhd (KL:JFTECH) surged as much as 13% to hit an intraday high of 79.5 sen in the morning trading session on Friday. The stock was one of the most actively traded on Bursa Malaysia.

At noon market break, it had pared some of its gains to settle at 78.5 sen per share, still up 11.3% from Thursday's close at 70.5 sen.

The share price of JF Technology, a manufacturer of high-performance test contacting solutions for global integrated circuit makers, has been on an uptrend since hitting a low of 50.5 sen on Dec 2. The stock surged as much as 18 sen or 34% in a single day on Dec 4, after announcing that it would begin US sales from January 2025 by leveraging the distribution network of US-based Ironwood Electronics. The stock is still down 16.5% so far this year.

JF Technology, however, is trading at a premium to its locally listed peers. It is now trading at 236 times trailing price-earnings (P/E) ratio. The high P/E valuation carries inherent high expectations for its US earnings performance.

In comparison, Bloomberg data showed Inari Amertron Bhd (KL:INARI) trading at 48 times P/E, followed by Frontken Corporation Bhd (KL:FRONTKN) at 52 times, Malaysian Pacific Industries Bhd (KL:MPI) at 30 times, Unisem (M) Bhd (KL:UNISEM) at 60 times, and FoundPac Group Bhd (KL:FPGROUP) at 29 times.

For context, during the 2021 semiconductor boom, JF Technology’s share price had reached an all-time high of RM2.10. Its trailing P/E ratio at that time was 138 times.

The company saw its net profit reach a record RM17.24 million in the financial year ended June 30, 2022 (FY2022), as revenue grew from RM26.81 million in FY2020 to RM45.34 million in FY2022.

However, FY2024 was filled with challenges extended from the year before, amid a highly demanding business operating environment. The group saw its net profit drop 52% to RM5.82 million from RM12.17 million in FY2023, hurt by lower profit margins, while revenue fell 8% to RM41.63 million from RM45.35 million.

For the first quarter ended Sept 30, 2024 (1QFY2025), net profit fell 89% to RM323,000 from RM3.08 million a year ago, on the back of a 7% drop in revenue to RM9.96 million, due to a shift in product mix, higher foreign exchange losses, increased depreciation from the new facility, and lower interest income.

For the past four years, JF Technology’s share price has been on a downward trend. From January 2021 to December 2022, despite reporting better financial numbers, the stock had fallen 61% from RM2.10 to 81 sen, which led to its P/E valuation falling from 138 times to 53 times.

At Friday's lunch break, a total of 16.12 million shares were traded, more than 14 times the 200-day average volume of 1.08 million shares.

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