SINGAPORE (Jan 10): CIMB likes Manufacturing Integration Technology (MIT), the capital goods supplier that primarily serves the semiconductor industry, for its new order wins and strong balance sheet.
Despite incurring a loss of $5.5 million in FY16, due to lack of order wins, the group turned around in FY17, announcing new order wins.
One of which is an $18 million order for its semiconductor equipment business. The group’s management attributed its return to profitability in 1H17 to this order win.
See: Manufacturing Integration Tech wins new orders totalling $18 mil
See: Manufacturing Integration Technology returns to profitability in 1H
The group secured another $5.5 million of new orders on Sept 4, 2017 and another $14.2 million new orders secured on Jan 2 this year.
See: Manufacturing Integration Tech bags new orders worth $14.2 mil
In addition, MIT was in a net cash position of $19.7 million or 8.68 cents per share as at end-June 2017, which represents 31.6% of its share price of 27.5 cents on Jan 5.
In an unrated report on Tuesday, analyst William Tng says, “Given its substantial net cash position and limited capex needs, the company announced (on 2 May 2017) it would implement a formal dividend policy of paying out not less than 25% of its net profit.”
On the other hand, the group on Jan 8 announced that it had entered into a non-binding term sheet with China Fortune-Tech Capital (CFTC) in relation to the proposed disposal of certain MIT subsidiaries involved in the design and manufacturing of automated equipment for the semiconductor industry.
On the outlook, global semiconductor sales are expected to hit US$408.7 billion ($545.2 billion) in 2017F, according to the World Semiconductor Trade Statistics Association (WSTSA).
This would mark the industry’s highest ever annual sales and the first time that sales would cross the US$400 billion mark. And as for 2018F, WSTSA expects a global semiconductor revenue growth of 7.0%.
As at 11.20am, shares in MIT are trading at 31 cents.
