HANA Gains 10% to All-Time High, Analyst Expects 2021 NP at ฿2.19Bn, Giving TP of ฿68

The share price of Hana Microelectronics Public Company Limited (HANA) rose ฿6.25/share or 10.37% to ฿66.50/share as of 11:13 local time in Thailand, with a trading value of 2,170 million baht.

 

KTBST Securities (KTBST) reiterated a “BUY” rating on HANA with a target price of 68.00 baht per share, which is pegged to 2021E PER of 25x (+4 SD above its 6-yr average). Key highlights includes 1) demand from all business sectors remains goods, which should boost 2Q21E earnings YoY, QoQ. 

2) the company has shifted focus to the business that normally provides high gross profit margin, including the power management business, particularly silicon carbide (SIC) –a major part of electrical equipment in EV. 

3) The RFID tag business in the US has been intact. Fourth, the company has a plan to increase production capacity at its Ayutthaya plant by 10% of total production in July. 

4) The company has mulled production expansion of its plant in China.

KTBST maintained 2021E/2022E net profit forecast at 2.19 billion baht (+15% YoY)/2.45 billion baht (+12%) given an uptrend in the semiconduction industry on the back of global  economic  recovery  and a change in consumer lifestyles, which has boded well for electronic components demand. 

In addition, KTBST saw upside to its forecast as the SIC business in South Korea and RFID tag in the US, which it believes will be a key earnings growth engine over the next two years, should benefit from growing demand in the global market, apart from the relatively higher gross profit margin compared to the existing businesses. 

HANA’s share price outperformed the SET Index by 2%/10% over the past one/three months, which KTBST believes  was due to a sharp decline earlier and the company’s promising growth outlook. KTBST forecasted EPS to grow 14% CAGR in 2020-22E and profitability to strengthen following the acquisition of the two businesses, which it expected to see sizable contribution in 2022E.