NANO provides advanced coating solutions to products such as smartphones, smartwatches, computers and automotive. The company serves many Fortune 500 companies with its special proprietary advanced materials and nano-fabrication capabilities.
Shopping for bargains. Shares of NANO are down more than 55% from their peak of S$6.67 in July 2021. A combination of disappointing 1H2021 results and the recent tech sell-off has now bought NANO’s shares near to its IPO price of S$2.59. The sell-off looks overdone in our view, and argue that value is now starting to appear.
Looking ahead. The sell-off is likely pricing in the weak 2021 results. However, looking past the current weakness and higher operating costs due to expansion plans, both topline and bottom line growth is expected to accelerate to around 20-30% YoY in 2022. There is potential for growth to surprise on the upside as it ramps up production at its new Shanghai plant.
Consensus estimates. There are 5 BUYS / 2 HOLDS / 2 SELLS and an average 12-month target price of S$3.97, implying a 35% from the last close price. While EPS is forecasted to only increase by 7% in FY2021F, consensus expects it to accelerate to 29% YoY in FY2022F and 20% YoY in FY2023F, bringing FY2021/22/23F P/E to 31x / 24x / 20x.
