Delayed but not derailed
- FY23 earnings of S$5.5m (-58.4% y-o-y) dragged down at the gross profit level, below expectations
- Revenue guidance hints at a better 2024; backend-semicon recovery likely tilted towards 2H24
- FY24/FY25 estimates reduced by 19%/15% as we tone down our margin assumptions
- Maintain BUY with lower TP of S$0.58
FY23 revenue of S$111.3m, down 15.1% y-o-y, attributable to weakness in the semiconductor segment. The decline primarily stemmed from weakness in the semiconductor back end, in tandem with the overall industry downturn. Accordingly, the share of revenue from the semiconductor segment fell to 47.9% in FY23 (vs. 55.4% in FY22). Revenue from the life sciences segment marginally declined by 1.9%, with the decline in business activity offset by growth in wallet share. Revenue from the EAMO (Electronics, Aerospace, Medical, and Others) segment remained flat with lower contribution from the electronics sub-segment offset by maiden full year contribution from GVT Suzhou Limited (formerly J-Dragon) and Formach.
FY23 earnings of S$5.5m (-58.4% y-o-y) with the key drag at the gross profit level, below expectations. The two key factors contributing to the contraction in gross profit are a decline in top lines and continued capacity absorption. Underlying the decline in gross profit is a contraction of 2.3 ppts in gross margin attributed to onboarding expenses during a semiconductor downturn, as well as fair value inventory adjustments.
Final dividend of 0.1 Scts/share proposed. Total dividend per share for FY23 stands at 0.1 Scts/share vs. 0.6 Scts/share in FY22.
