PETALING JAYA: Despite lingering downside risks, PIE. Industrial Bhd is expected to see improvement in earnings in the second quarter of its financial year 2024 (2Q24).Kenanga Research said looking ahead to 2Q24, it anticipates a stronger quarter sequentially as the resolution of the integrated circuits (IC) supply issue would restore production for the new customer it secured to optimal levels.
“In addition, renovation works at Plant 5 (about 100,000 sq ft) have been completed and it is in the final stages of equipment installation.
“Dedicated entirely to the new customer, the plant is set to commence operations by June 2024, and will double the floor space allocation for customer A, which currently occupies the entirety of Plant 3.
“Furthermore, the group has begun producing for four smaller customers’ products related to drone devices for light shows, diagnostic devices for oral cancer, smart home and industrial sensors. These should add about 8% to 12% to financial year 2024 revenue,” the research house added.For 1Q24, PIE Industrial posted a net profit of RM9.7mil compared with RM14.11mil a year ago. Earnings per share for the said quarter was 2.55 sen against 3.67 sen in the similar period of last year. Revenue shrank to RM239.18mil in 1Q24 compared with RM332.45mil a year ago.
The group provides major multinational companies for various electronics, telecommunications and computer peripheral products.
Kenanga Research said the downside risk to its call for the group include loss of key orders, non-renewal of contracts by key customers, labour shortage and rising labour cost, negative reviews on foreign workers welfare by activists and unfavourable currency movements.
