AmInvestment lowers estimates on Pentamaster following earnings disappointment

KUALA LUMPUR: AmInvestment Bank Research has revised lower its earnings forecasts on Pentamaster Corp Bhd to account for the impact of the global chip shortage and longer project lead times for the group's factory automated solutions segment.

The research house, which has a "hold" call, said its FY21-23 forecasts were reduced by 9% to 10% while its fair value was cut to RM4.99 a share from RM5.52 a share previously.

In 1QFY21, Pentamaster's results disappointed at RM17mil after excluding a one-off exceptional loss of RM800,000 mainly due to losses from changes in fair value of forward contracts and loss on disposal of PPE being offset by unrealised forex gain.

The result came to 16% and AmInvestment's and consensus full-year estimate.

"Although order momentum has been improving since the beginning of 2021, the group is closely monitoring the global supply chain constraints and focusing on material sourcing to ensure timely delivery of its customer commitments.

"Pentamaster expects structural growth in the automotive segment in the medium term and growth in the electro-optical segment amid the rollout of 5G and as newer smart sensors are developed in the smart devices market," said AmInvestment
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