KUALA LUMPUR (Oct 8): THMY Holdings Bhd may have an 81% upside from its listing price as the automated test firm rides on a global supply chain shift, said Tradeview Research.
Rising geopolitical tensions have accelerated the ‘China-plus-one’ strategy, benefiting the company’s operations in Malaysia and Thailand which together account for more than 60% of its revenue, the research house said in a note and recommended that investors subscribe to THMY's shares.
“We like THMY for its strong foothold in Southeast Asia’s automated test market, supported by its full-turnkey capability and Malaysia-Thailand base that benefits from global trade diversification,” Tradeview said.
The house has a target price of 56 sen for THMY versus its initial public offering (IPO) price of 31 sen per share. Applications for the IPO will close on Oct 9 and listing on the ACE Market has been scheduled for Oct 23.
Based in Penang, THMY provides testing systems for electronic circuit boards, serving customers in Europe, North America and the Asia-Pacific in industries ranging from technology to healthcare.
Proceeds from the IPO will be used to construct a new factory, repay bank borrowings, fund design, research and development, provide working capital, and cover listing expenses, according to its prospectus.
“We believe THMY can fill up its new capacity via additional orders from existing hyperscaler clients,” Tradeview said, noting a boom in capital expenditure on data centres and hardware to power artificial intelligence workloads.
Once its expansions take off, revenue could grow about 28% on average over the four financial years, according to Tradeview’s projections.
In terms of valuations, the target price of 56 sen values THMY at nearly 32 times its forward earnings, in line with industry peers, which Tradeview said is justified given its multi-fold expansion in production capacity and “strategic edge” from global trade diversification.