Supercomnet Technologies Bhd

(SCOMNET, 0001)

Supercomnet Technologies Bhd (Fundamental BUY with TP 1.63)

• We remain convinced on Supercomnet Technologies Bhd (“Scomnet”) growth prospects thus raising our
earnings estimates by 12% and 13% for this and next year respectively.
• We are reiterating our BUY call with a target price of RM1.63 premised on 30x PER FY21 which is still at
discount to Bursa Malaysia Healthcare Index 34x PER.
• Scomnet share price has surged to high of RM1.60 since our initial coverage report back in April 2020
and has since pull back to a more reasonable level post its 1Q20 results.
• It remains the leading Original Equipment Manufacturer of automotive cables and with their medical
segment will continue to be the key catalyst for growth over the next few years from increased
spending in healthcare amidst the Covid-19 pandemic.
• Based on their profit track record, Main Board transfer would make sense and it will serve as a re-rating
catalyst to justify their healthcare PER.
• To recap, its medical cables are approved by the European Medical Agency (“EMA”) and Food & Drug
Administration (“FDA”) for Europe and North & Central America with key clients such as Edwards
Lifesciences and Ambu, both major players in different segments of cardiovascular medical devices
space globally.
• Balance sheet remains robust with net cash of RM50m and zero borrowings.
• Margins is set to improve to 18% from the current 15% with new products in the pipeline.
• Growth momentum remains on track with double digit growth of 49% and 25% in EPS for FY20 and
FY21 respectively potentially pushing it to record levels.
This document has been prepared for general circulation based on information obtained from sources believed
to be reliable but we do not make any representations as to its accuracy or completeness. Any
recommendation contained in this document does not have regard to the specific investment objectives,
financial situation and the particular needs of any specific person who may read this document. This document
is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by
addressees and further shall not be re-distributed to any other third party. Rakuten Trade Sdn Bhd accepts no
liability whatsoever for any direct or consequential loss arising from any use of this document or any
solicitations of an offer to buy or sell any securities. Rakuten Trade Sdn Bhd and its associates, their directors,
and/or employees may have positions in, and may affect transactions in securities mentioned herein from time
to time in the open market or otherwise, and may receive brokerage fees or act as principal or agent in dealings
with respect to these companies.
The Contra Trade account allows clients to buy shares based on available cash and/or collateral shares value
after hair cut at a higher multiplier. The multiplier varies according to the type of counters clients intend to buy.
Outstanding purchase(s) in the Contra Account need to be paid and/or settled within 2 (two) trading days after
the transaction date (T), failing which it will be force-sold on T+2.
Published:

RAKUTEN TRADE SDN BHD

Registration No: 199301011963 (266701-P) Kenny Yee Shen Pin
Level 7, Kenanga Tower, 237, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia Head of Research