The share price of Hana Microelectronics Public Company Limited (HANA) rose ฿4.25/share or 5.61% to ฿80.00/share as of 11:27 local time in Thailand, with a trading value of 1,467 million baht.
KTBST Securities (KTBST) reiterates a HOLD rating on HANA and a target price of 76.00 baht, which is pegged to 2022E PER of 25x, or +4 SD above its 6-yr average. HANA reported 2Q21 net profit of 737 million baht, up +8% YoY, +145% QoQ. The results exceeded the market forecast of 526 million baht and KTBST forecast of 770 million baht (+61% YoY, +87% QoQ) as 1) both USD and THB revenue grew across all businesses, and 2) gross profit margin widened YoY, QoQ to 16.8% on economies of scale and a weaker baht QoQ.
KTBST maintains 2021E/2022E net profit forecast at 2.19 billion baht (+15% YoY)/2.46 billion baht (+12%) as 1) production capacity has increased by 10% since July, and 2) KTBST expects gross profit margin to be 13.2%. There is upside potential to its 2021E forecast, as gross profit margin looks likely to come in stronger than estimated given baht weakening. KTBST, however, sees gross profit margin returning to its normal level, as the baht is forecasted to strengthen against the USD in 4Q21E should the COVID-19 situation improve.
HANA’s stock price outperformed the SET Index by 39%/36% over the past three/six months given the brighter prospect in the global semiconductor industry and a limited impact from the COVID-19 outbreak. However, the stock’s valuation looks demanding, trading at 25x PER to KTBST 2022E forecast compared to its peak of 21x.