HANA Falls 5%, Analyst Forecasts Lower Sales in 3Q21 from Workplace Quarantine Measures

The share price of Hana Microelectronics Public Company Limited (HANA) dropped ฿4.00/share or 5.11% to ฿74.25/share as of 15:10 local time in Thailand, with a trading value of 1,350 million baht.

KGI Securities (KGI) said that despite possibly positive sales momentum in 2H21 from the launch of Apple’s new models and rising demand from 5G adoption, HANA’s sales could drop QoQ in 3Q21 due to quarantine measures on the company’s workers. HANA’s plant in Ayutthaya (approximately 35% of total sales) is experiencing a COVID419 outbreak, causing a hiccup in its production. The company estimates 3Q21 sales (baht terms) to soften 445%. The slower sales would imply a possible contraction in gross margin, so KGI is currently maintaining its 2021 sales and gross margin assumptions and leaving the better-than-expected performance in 2Q21 as a cushion for its 3Q21 operation.

Thus, KGI maintains a rating of Neutral on HANA with an end-2022 target price of 66.00 baht based on unchanged PER 20.0x (+2.0 S.D its historical average).