KGI: Grand Venture Technology (GVTL SP) – Booster shot from acquisitions
alanyeo
BUY Entry – 1.08 Target – 1.37 Stop Loss – 0.98
Grand Venture Technology (GVTL) provides engineering, assembly, testing and product lifecycle management services for the manufacture of complex precision machining and sheet metal components and modules. Its clients are mainly in the semiconductor, analytical life sciences and electronics sectors, and includes multinationals such as Teradyne and BE Semiconductor Industries.
Flying into aerospace and diving into medical diagnostics. GVTL in December 2021 announced the S$20mn acquisition of two homegrown companies. The acquisitions are expected to be completed by 1Q2022 and will augment the group’s capabilities in China and Malaysia, and help GVTL gain access to clients in the aerospace, medical and semiconductor industries.
Street consensus has 2 BUYS and 1 HOLD, with a 12m average TP of S$1.71 (+56% upside from last close price). FY2021F and 22F EPS is forecasted to grow 124% YoY and 80% YoY, respectively, bringing down forward P/Es to 22x and 12x.
Currently trading below placement price. GVTL is currently trading just slightly below the S$1.14 placement price where it raised gross proceeds of S$39mn back in September 2021.
Upcoming results. Full-year results will likely be announced on Friday, 25 February 2022. This could provide a much-needed catalyst for its shares after having corrected by as much as 30% from the peak.
