Aurelius Technologies Berhad - Conclude stellar FY24
Fri, 28-Feb-2025 08:03 am
by Jayden Tan • Apex Research

Counter

ATECH (5302)

Target Price (RM)

4.170

Recommendation

Buy

Summary

  • Atech reported FY24 core net profit of RM61.9m, slightly above expectations at 108% of our RM57.5m forecast, after excluding significant forex and deferred tax effects.

  • In 4QFY24, CNP grew +14.9% qoq, benefiting from lower material costs booked at weaker USD rates in 3Q24, though revenue declined -3.2% qoq to RM160.5m due to lower IoT product loading. 

  • Maintain BUY with an unchanged TP of RM4.17, based on 25.0x P/E on FY25F EPS of 16.7 sen, supported by P5 expansion (operational by Dec 2024) to meet strong order flows. 

 

Results slightly above expectations. Excluding significant forex and deferred tax effects, FY24 core net profit (CNP) amounted to RM61.9m, slightly surpassing expectations by reaching 108% of our RM57.5m forecast.

 

YoY. No direct year-over-year comparison is available due to a change in the financial year-end during last year’s 4Q.

 

QoQ. CNP grew by 14.9% qoq to RM16.1m, supported by a more favourable gross profit margin stemming from lower material costs locked in during a weaker USD in 3Q24. However, quarterly revenue dipped 3.2% qoq to RM160.5m on reduced loading for IoT products.

 

Dividend. Atech announced a third FY24 dividend of 2.9 sen/share, bringing the full-year dividend to 8.7 sen/share. The payout is scheduled for 11 April 2025.

 

Outlook. We remain optimistic about the Group’s growth trajectory, with additional momentum anticipated in FY25 and beyond. The P5 capacity expansion—slated to become operational by December 2024—will address robust order flows from existing and new customers, including new product lines. Although the orderbook declined to RM437m as of 10 February 2025 (from RM475m on 18 November 2024), we attribute this to normal seasonality at the start of the year. Notably, the reported orderbook excludes both Customer F and other new customers. While our outlook is positive, we remain mindful of potential risks from tariff uncertainties that may impact volume loading from its largest US-based customer.

 

Earnings Revision. As there are still no concrete details on the tariff threats, we maintain our FY25F and FY26F earnings forecasts for now.

 

Valuation. We reiterate our BUY recommendation on Atech with a target price of RM4.17, derived by applying a 25.0x P/E multiple to our FY25F EPS forecast of 16.7 sen and incorporating a 0% ESG premium/discount, in line with the company’s three-star ESG rating.

 

Risk. Ongoing uncertainties surrounding potential Trump-era tariffs.

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