PIE Industrial beat expectations, share TP bumped up to RM4.60

PIE Industrial Bhd has retained its ‘Buy’ call with a higher 52-target price (TP) of RM4.60 at Affin Hwang Investment Bank Bhd (AHIB) as it beat expectations on the back of higher orders, from both old and new customers, in its electronic manufacturing services (EMS) business.

“We continue to like PIE Industrial for its promising earnings growth over the coming years, undemanding valuations against other EMS peers, as well as being a beneficiary of the ongoing US-China tensions,” AHIB said in a note released today.

PIE Industrial closed last Friday at RM3.39, valuing the company at RM1.3 billion. Its 52-week high was RM3.76 and low at RM2.61.

For the financial year ended Dec 31, 2023 (FY23), PIE Industrial posted a net profit of RM75.4 million, up 6% from the year before, on a turnover of RM1.217 billion, up 4% from FY22.

“Overall, despite a global semiconductor slowdown and excess-inventory correction, the group still managed to post positive earnings growth on the back of higher revenue from new product orders, as well as increased orders from both new and existing customers.

“Notably, its fourth quarter of 2023 recorded a net profit of RM28 million — representing a jump by +38% quarter-on-quarter. Despite the flattish revenue sequentially, its bottom line was lifted by higher-margin product mix during the quarter,” according to the report.

Through its subsidiaries, PIE Industrial has operations in contract manufacturing services, manufactures raw wires and cables, and trades personal computer peripheral products. — TMR