KUALA LUMPUR: Datasonic Group Bhd's share price dropped nearly five per cent to 49 sen in early trade this morning despite record-high earnings for financial year 2024 (FY24).
As at 10.25am, the stock lost 2.5 sen or 4.85 per cent, valuing it at RM1.45 billion. Some 73 million shares changed hands.
Yesterday, Datasonic's FY24 revenue surged 6.8 per cent year-on-year (YoY) to a historic high of RM368.3 million. This translated to a record core profit of RM91.1 million, which rose 22.5 per cent YoY.
The company declared a fourth interim dividend per share (DPS) of 1.3 sen compare to 0.75 sen a year earlier, bringing year-to-date DPS to 3.0 sen versus 2.0 sen in FY23.
RHB Research said the results beat its own (115.5 per cent) and consensus (116.6 per cent) expectations, backed by higher demand for both passport and smartcard solutions, coupled with its own average sales price (ASP) adjustments.
"Margin expansion resulting from higher ASP, economies of scale and lower depreciation (majority of the equipment was fully depreciated) supported the stronger bottomline growth," it said in a research note today.
Following the strong earnings in FY24, the firm expects Datasonic's earnings growth to continue into FY25, given the sustained healthy demand for its products and margin expansion.
It added that the company's current below-mean valuation is attractive, considering the healthy yield, strong cash flow generation and potential upside from new project wins.
"While its outstanding orderbook is now at a record low (less than RM200 million) following the expiration of its contract on May 31, we remain confident on the continuity of contracts for identity card and passport solutions – given Datasonics's strong track record in delivering quality products without disruptions, at competitive pricing," it said.
RHB Research maintained its FY25-26 earnings forecast on Datasonic but raised its target price to 64 sen from 62 sen, as it roll forward valuation base year to FY25.
