Analysts have a positive outlook on Hana Microelectronics Public Company Limited (SET: HANA)’s operations with robust outlook for sales and margin while giving a wide upside to target price despite shares soaring more than 40% this month.
Share prices of HANA had risen 44.60% in November, outperforming other peers in the sector.
Tisco Securities has given a “BUY” recommendation on HANA with a target price at THB60 per share. The securities company stated that though the economic backdrop still looks weak, HANA has seen no significant drop in orders in 4Q as its portfolio diversification eases impact from slowdown in the consumer segment. For the PMS arm, the first production yield was in-line with planned targets and more equipment will be installed as HANA’s SiC MOSFET designs have been well received and a number of potential clients are in the qualifying phase (already secured one big EV charger customer in Korea). HANA has also started building its order book for its Si, SiC diodes/MOSFET and plans to double capacity by 4Q23.
Tisco revised down net profit forecast for 2022F by 4% to reflect the huge FX loss of -Bt807m during 9M22 but revise up core profit for 2022/23F by 18%/17% to Bt2,359m/Bt2,617m to incorporate more robust outlook for sales and margin. Though management has not provided the separate margin and level of incurred loss for PMS, Tisco stated that it believed the loss will narrow going forward as PMS enters mass production. Tisco also revised down its SG&A to sales to 6.6% from 7.4% for 2023F, seeing a lower-than-expected trajectory for PMS during 9M22.
Meanwhile, Finansia Syrus Securities (FSS) cited that the management guided a solid EV growth outlook. It should support the revenue from its new product, i.e., SiC, which has positive feedback from South Korean and Chinese customers. It would completely offset the weakness in mobiles and computers. HANA maintained its SiC revenue target for 2022-2023. Also, it anticipated a lower loss in 2023 and a breakeven in late 2024-1H25. Since the 3Q22 profit blew past FSS’ estimate, FSS raised the 2022-2023 estimate by 19-29% to a growth rate of 5% Y-Y (from -19% Y-Y) and 4% Y-Y while maintaining 2023 exchange rate assumption at Bt33/USD. FSS rated HANA as BUY after increasing its target price to Bt62.