According to RHB research, the group' subsidiary Mace Instrumentation should benefit from an order ramp-up of 5G-related equipment and possibly electric vehicle charging stations by its main customer.
"We expect this segment to grow from last year’s c.MYR7m bottomline on the sustained strong orders and production commencement at the new plant (additional 50% capacity) by 3Q20, which is equipped with research & development and new product introduction processes," it said.
Meanwhile, the group's phase two aerospace venture in secondary surface treatment processes remains intact, and it sis looking to finalise the agreement with universal Alloy Corporate Europe by 3Q20 to kickstart the multi-year growth story.
RHB slashed FY20 forecast net profit by 10.7% to factor in lower margin assumptions but left its FY21 and FY22 earnings estimates unchanged.
"Although muted 2020 earnings look inevitable amid a soft 1H, the recent share price optimism suggests that the market has already factored in the weakness and is looking beyond 2020," it said.
The research house maintained its "buy" call on the counter and raised its target price to RM1.63 as it rolled forward its valuation year to FY21 and raised its price-earnings to 20x.
In 1Q20, JHM's core earnings fell 84.4% year-on-year to RM1.5mil, which was only 4.5% of RHB's full-year estimate.
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