The group reported a RM27.6 million net profit on the back of a RM301.1 million revenue.
As for the financial quarter ended June 30, 2023, net profit amounted to RM14.3 million while revenue stood at RM143.7 million.
Following the encouraging results, Kenanga has revised the group’s target price upwards to RM1.75, up 25% from RM1.40 previously.
The counter closed four sen or 2.55% lower at RM1.53 today.
Strong outlook
In a note today, the research house said it projects a stronger H2 FY2023 for NationGate.
The projection is due to the group’s increased production for existing customers and the entry of new Chinese players in artificial intelligence-related fields.
NationGate, it noted, is also expanding its operations in an attempt to take advantage of the new wave of China-based vendors.
“We fine-tune our FY2023 net profit forecast by 5% and raise that of FY2024 by 15%,” said Kenanga in the note.
It holds a positive view on the group’s exposure to the fast-growing industrial and commercial products used in the networking and telecommunications sectors.
This exposure enables the group to execute highly complex jobs and offer greater added-value services, said Kenanga.
NationGate is a Malaysia-based electronic manufacturing services (EMS) provider. It focuses on the assembly of electronic components and products to produce circuit boards and other semiconductor devices.
The group made an impressive debut on the ACE Market of Bursa Malaysia on Jan 12 earlier this year.
Its shares closed at RM1 on that day, 163% higher than its 38 sen reference price.
Year-to-date, the counter has risen 53% to RM1.53. Its market capitalisation currently stands at RM3.17 billion.
In June, NationGate’s managing director Ooi Eng Leong failed in his attempt to wholly acquire Ewein Bhd through a mandatory takeover offer.
Ooi, together with two other persons, had planned to acquire the 49.41% of Ewein’s shares not owned by them for RM89.41 million or 60 sen per share.
Following the failed bid, their combined equity in Ewein remains at the 50.59% level.
Ewein, an investment holdings company, is involved in the manufacture of precision sheet metal moulds and related tools.