PETALING JAYA: Supercomnet Technologies Bhd
(Scomnet) is expected to generate higher first-quarter earnings in the soon-to-be-announced results by the end of next month (1Q25), underpinned by stronger sales from its medical segment.
TA Research anticipated the group’s quarterly profit to range between RM8.5mil and RM10.5mil, reflecting a year-on-year growth of 5.6% to 30.4%.
While some quarters are concerned about the impact of the US trade war and tariffs, the research house said the impact would be manageable.
This was considering that the US market only took up 10.2% of the group’s revenue exposure in financial year 2023 (FY23), compared to the Malaysian and Dominican Republic markets, which accounted for 54% and 32%, respectively.
“We understand that orders from key customers such as Customer A (39% of sales) and Customer B (37% of sales) remained strong and intact,” it said, adding that while Customer B delivered 10% of its sales to the United States, Customer B would absorb the 10% tariff as it was noted that Scomnet is the sole supplier for the medical segment.
TA Research is also confident in the group’s targets to begin mass production in the second half of 2025, considering strong commitments from both Scomnet and Customer I in fine-tuning issues related to the first drop of liquid at its Kedah plant.
As for its automotive segment, it is anticipated that the group’s sales to Stellantis would be flat as demand for Peugeot cars in the Asia-Pacific region is expected to remain soft.
Following this development, TA Research said the group is looking to diversify its customer base and is in talks with two potential new clients.
“We understand that one of these clients, Customer V, would conduct a final audit in May.
“If this audit is successful, the mass production of wire harness may begin in June 2025,” it added.
Scomnet is also said to be in talks with a European automotive player to produce wire harnesses for Chrysler’s models in the US market.
TA Research reiterated a “buy” call on Scomnet with a maintained target price of RM1.63.
“We continue to like Scomnet due to its exposure to the resilient healthcare industry, ongoing shift to high-value-added products and accelerated growth from the expansion of its medical and automotive segments,” it added.
The stock closed higher at 89 sen yesterday.
