PETALING JAYA: Analysts are positive on light emitting diode (LED) maker D&O Green Technologies Bhd
’s outlook in 2025 due to, among others, stronger customer demand, robust product portfolio and a higher plant utilisation rate.
Phillip Capital Research expects D&O’s plant utilisation to improve to 85% in the second half of 2024 (2H24) against 75% in 1H24, driven by seasonally stronger demand and further bolstered by reduced inventory levels.
Looking ahead, it expects estimated earnings growth for 2025 to be fuelled by a robust product portfolio. The management expects the SmartLED sales to nearly double to 147 million units, which the research house projects would contribute about 10% of the total revenue.
“The demand for the SpicePlus 2520 tail light LED is forecast to nearly double to one billion units, benefiting from strong market penetration due to its superior specifications compared to competitors.
“The Nagajo 1519 LED, starting from a low base, is expected to see strong growth driven by rising customer adoption.
“The Bevel LED 1515, designed for large-screen infotainment systems, with D&O being one of only two global producers, is poised to be the next growth phase in 2026 to 2027,” the brokerage noted.
Phillip Capital is maintaining its “buy” call on the company with a lower target price of RM3.
Meanwhile, Kenanga Research said the outlook for D&O is bright in the near term underpinned by various growth drivers.
It remains optimistic about the company’s promising outlook attributed by its enhanced operational efficiency and the recent strengthening of the ringgit against the US dollar.
Kenanga Research is maintaining its earnings forecasts for financial year 2024 (FY24) and FY25, with an unchanged target price of RM2.64 a share and as well as maintaining its “outperform” rating on the stock.
