Quarterly revenue fell by 45.7% to RM165.58 million from RM305.17 million a year earlier, it said in a Bursa Malaysia filing yesterday.
Net profit for 9M FY2023 fell by 29% to RM44.89 million from RM63.09 million in the previous corresponding period, while revenue fell 36% to RM466.72 million from RM731.17 million.
However, on a quarter-on-quarter (q-o-q) basis, it posted a 15% rise in revenue to RM166 million and a 55% increase in core net profit to RM19 million.
Kenanga Research and PhilipCapital are anticipating its earnings will continue to improve into the fourth quarter (4Q) given the results for the first nine months (9M FY2023) had met their expectations.
“NationGate’s 9M FY2023 net profit accounted for only 64% and 65% of our full-year forecast and the full year consensus estimate, respectively. However, we deem the results within expectations as we expect a bumper Q4,” said Kenanga in a note today.
Growing earnings momentum
It noted NationGate is confident the positive earnings momentum in Q3 FY2023 will be extended into Q4 FY2023, as the group is taking on the production of a broader range of products of its key customer, specialising in optical transceivers.
In addition, it said the group expects to on board a new data centre customer, xFusion in Q2 2024, involving the printed circuit board assembly (PCBA) process.
Kenanga has maintained its “outperform” call with unchanged target price (TP) of RM1.70.
Meanwhile, PhilipCapital has reiterated their “buy” rating with a TP at RM1.80.
It said the group is positioned strategically in key secular growth trends like 5G, artificial intelligence (AI) data centres, and electric vehicles, which is expected to drive a 27% compound annual growth rate (CAGR) over 2022-2025.
NationGate offers electronics manufacturing services and technical support to various sectors including networking, communications, instrumentation, consumer products, medical devices, and automotive sectors.
It was listed on the ACE Market on Jan 12 this year, with its RM165.5 million initial public offering priced at 38 sen per share.
Its shares ended 1 sen or 0.83% higher at RM1.22, giving it a market capitalisation of RM2.53 billion. The stock has been on a roll since its listing, surging three-fold or 221% from its IPO price.