Mercury Securities has initiated coverage on UWC Bhd with a TP of RM3.67 based on FY23F EPS of 10.4 sen and a PE of 35.3x, in line with the 10-year average of the technology industry.
It said that it likes the stock for its attractive expansion plans and strong track record, well-positioned to leverage on the growing world semiconductor market which is forecasted by the World Semiconductor Trade Statistics (WSTS) to grow by 16.3% and 5.1% in 2022 and 2023.
UWC is a one-stop solution centre providing modules to full turnkey assembly manufacturing of automated test equipment (ATE) ranging from semiconductor to life-science industry.
The new 5G mm wave tester project for smart devices and vehicle-to-vehicle (V2V) communication sensor emulator project is expected to commence by 2H22 and contribute RM50m to revenue annually. The company expects to sell 10 units of testers and 10 units of emulators per month.
The stockbroking firm said that the company has an order book of RM190m, expected to be fully recognized within 1H23, with the arrival of more workers.
It said that under the leadership of Group CEO Dato’ Ng Chai Eng who is responsible for the overall management and business operations of UWC, the company was able to achieve a revenue and profit after tax record in FY21, and a 3-year revenue CAGR of 27.8% from FY18 to FY21, despite the COVID-19 pandemic in FY20.
