KUALA LUMPUR: Kenanga Investment Bank Research anticipates JHM Consolidation Bhd to have recorded firm earnings growth for 4QFY20 as orders from key customers have returned to pre-Covid-19 levels while the final quarter is seasonally strong for the group.
The research house, which has a "market perform" recommendation, is also positive on JHM's its recovery momentum going into FY21.
JHM is eyeing 25% year-on-year order growth from its existing customer owing to improving car sales.
It added order growth could potentially rise further from two or three more new prospects that are still at the qualification phase.
On JHM's new customer, Kenanga Research said the current orders at hand are estimated to be about 8% of the group's FY21 revenue and could potentially grow 4x by 2022 upon securing the supply of PCBA and model assembly, which will require high-end SMT machines.
The resesearch house maintained a FY20 and FY21 net profit of RM24mil and RM49.8mil respectively.
However, its target price was raised to RM2.35 from RM2 previoulsly as it factored in a higher FY21 price-earnings ratio of 26 times on greater interest from institutional clients post its Main Market transfer.
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