PETALING JAYA: SKP Resources Bhd
is likely to register revenue of RM2.15bil for its financial year ending March 31, 2025 (FY25) driven by higher sales from its key customers as on the back of improved order visibility as well as new customers.
“Our recent conversation with management suggests that order visibility has improved from its key customer since the beginning of the year,” CGS International (CGSI) Research said in a report.
The research house said the company has been receiving several business inquiries from new customers to provide backend assembly services related to household products.
“SKP has onboarded two new customers earlier this year, which are slated to ramp up production by the second quarter of 2025 with a targeted combined annual revenue of RM150mil.
“We lift our FY24 to FY26 earnings per share (EPS) by 15% to 16% as we project higher revenue growth from both its key customer and other customers,” CGSI Research added.
It estimated revenue from the key customer to grow by 15% in FY25 to RM1.63bil, and for other customers to grow by 9% to RM514mil, bringing the total FY25 revenue growth of 13.5% to RM2.15bil.
CGSI Research also expected the company’s earnings before interest, taxes, depreciation, and amortisation margin to recover gradually from 8.9% in FY24 to 9.4%-9.9% in FY25 and FY26, close to the FY15 to FY19 average of 9.6%.
“We believe Malaysian electronic manufacturing services (EMS) companies, including SKP, would benefit from the recent US government’s announcement of import tariffs on China goods, as this could accelerate the relocation of Chinese manufacturers into Malaysia.
“This is especially for consumer-related products in which SKP has a strong track record and comprehensive in-house capabilities.
“However, to fully benefit from the China Plus One strategy, SKP will need to start making strong inroads into industrial products assembly, in our view, given the recent spillover of artificial intelligence server assembly contracts won by other Malaysian EMS players,” it pointed out.
