TA Research expects the ongoing United States and China trade tension will continue presenting excellent opportunities to SKP.
PETALING JAYA: SKP Resources Bhd
is expected to deliver stronger earnings performance for financial year 2025 (FY25) as its order visibility has improved since early of the year from its key customer.
In a note, TA Research said the improvement was driven by inventory replenishment and demand recovery for selected household products.
With the latest internal sales forecasts, SKP would be able to deliver a stronger earnings performance for FY25, addded TA Research.
It said the group has also secured two new customers from Europe and the United States in recent months.
“The total combined annual revenue is estimated to be around RM140mil and the commercial production for the new customers will kick-start soon.
“Although the actual earnings contribution from these two new customers are relatively small, we believe that successful execution could lead to higher order volume later on,” said the research firm.
TA Research retains its “buy” call on the stock with a target price of RM1.43 a share based on 15 times 2025 earnings.
“We expect the ongoing United States and China trade tension will continue presenting excellent opportunities to SKP.
This is because the recent tariff rate increase from 25% to 50% on certain semiconductor imports from China has further prompted various companies to diversify their operations to other countries.
“Management guided that the group has been receiving more business inquiries to provide assembly services for household products.”
Currently, the new plant (Site 5) in Johor Baru still has ample floor space to cater for new customers.
SKP’s management also revealed that the group is currently in discussion with a few prospective customers to fill up the space, added TA Research.
