Based in Singapore, NanoFilm Technologies International ltd offers nanotechnology solutions in Asia. The company provides tech-based solutions across a wide range of industries.
Located at Ayer Rajah Crescent, the company provides customized operating software for different companies and training as well. NanoFilm also offers customer service, spare parts, and other after-sales services. They also offer advanced Nano products for their clients across the continent.
About NanoFilm
Incorporated in 1999, NanoFilm technologies international ltd operates through the following business segments:
- Nanofabrication
- Industrial equipment business unit
- Advanced materials business unit
The advanced materials segment provides material science solutions through surface nanotechnology solutions applied to different industries. The industrial part designs and develops personalized coating equipment, automation systems, cleaning lines, and after-sale services for customers across other markets.
On the other hand, the nanofabrication segment manufactures and supplies Nano products on sensory components and optical imaging lenses while still providing customer end-products.
NanoFilm Technologies International LTD also engages in research and experimental development, markets and sells industrial machinery and equipment, the solar cell business, and provides coating services to end-users in the precision engineering and printing circuit industries. The company also offers technical and consultation services for precision and automotive components.
NanoFilm technologies international is also involved in forming and manufacturing modules, processing, manufacturing, and assembly of plastic products, trading and sale of equipment and electronics, and sale of auto parts.
NanoFilm Technologies International Target Price & Share Price
Current Share Price NanoFilm Technologies International Limited (MZH.SI): S $2.700
At close: March 29 05:16PM SGT
NanoFilm Technologies International Ltd (SGX: MZH) Share Price History
Source: https://sginvestors.io/sgx/stock/mzh-nanofilm/share-price-history
What Do Analysts Say?
NanoFilm Technologies International limited is projected to have an upward growth in earnings of 8% during FY21, even with the high production costs, including the one-off operating cost. However, its target price has been reduced to S$4.12 from S$4.96 due to the low growth rate assumption for the FY22F.
Analysts estimate that NanoFilm Technologies is expected to continue seeing the high operating expenses as it prepares to expand the company for future growth. They ascribe a 15% premium to P/E to a growth ratio of 1.0x on its potential growth prospects and proprietary surface solutions nanotechnology, leading to a lower target price.
According to the CGS-CIMB Research 2022, NanoFilm Technologies FY21 revenue grew by 13% y-o-y. However, according to Bloomberg consensus full-year expectations, it missed its expectation by 92%. Its profit increased by 8% to S$6.2 million, which was in line with the Bloomberg consensus expectations.
The CGS-CIMB Research 2022 has lowered their expectation on FY22-23F revenue by 9.5% -9.9%. This leads to a 1.8-2% decrease in the FY22-23F EPS estimates. NanoFilm is, however, quite optimistic on its FY22F outlook.
Still, it risks disruption due to disruptions related to the COVID-19 pandemic and the consumer demand impact from the Ukraine-Russia tensions.
Is NanoFilm a Good Stock to Buy?
NanoFilm technologies net profits over 2H2016 to 1H2020 was S$165.5 m, with the actual profit as S$142.9m. Its dividend payout in 2020 was S$9.6 m which means that the dividend yield was 0.5% based on the share’s closing price of S$3.01 on 2nd November and its post-IPO enlarged share base.
It is estimated that between 2H2020 to 1H2021, the company’s revenue could hit S$177.4m if we assume all the growth rates are applied to all the business segments. The net profits could hit S$46.4m assuming the net profit margins do not change and the company will not pay the 2% coupon on its S$50M convertible bonds.
This could then translate to an earning of S$0.702 per share or a 42.9x forward P/E based on the share’s closing price of S$3.01 as of 2nd November 2020.
Its dividend yield could be at 0.5% since NanoFilm intends to distribute 20% of its net profit after tax in FY2021. This means S$0.0140 dividend per share.
The 42.9x P/E and 0.5% dividend yield is not as compelling as most unless the company has a high growth rate and can make huge profits die to certain competitive strengths that NanoFilm has, which makes it a great company to invest in.
The biggest concern with NanoFilm is its customer concentration. The company has top 5 customers accounting for 81.9% of the firm’s net income. Other than that, there is the risk of the new technologies rendering NanoFilm proprietary processes obsolete.
To buy NanoFilm stock check out on opening brokerage account in Singapore to get started!
What Are The Significant Risks Of Nanofilm Technologies International?
NanoFilm is one of the most extensive listings in Singapore in eight years. However, it has some risks associated with it, as it is with most companies.
Here are the significant risks associated with the company:
The Key Department Risk
The success of the NanoFilm is dependent on the R&D department to help it maintain its competitive advantage and keep up with the industry demands. Any department failure on the departure of key employees is likely to be a significant hit.
The Customer concentration risk
NanoFilm has over 300 customers across different industries, but its main customers have taken a considerable part of its revenue. Its largest customer accounts for 57% of the company’s revenues.
Its top five customers contribute 82% of the total company’s revenue. If any of them pulled out their business, NanoFilm would take a hit.
The Valuation Risk
NanoFilm’s current share price is S$3.03, which is 56 times its 2019 earnings which are very high. Its high valuation can be substantiated if the company can grow by 50% every year in the near future while giving a PEG ratio of around 1x.
However, between 2017-2019 the company’s net profit grew by 15% per annum. Therefore, it is hard to see how it can grow by 50% annually in the coming year, even with an increase in market share.
Related Questions
Why did the Nanofilm share price drop?
The CGS-CIMB lowered Nanofilm Technologies’ target price from S$4.02 to S$3.92 due to the potential high operating cost and the revenue expectations that may take longer to be realized. At the same time, the company focuses on long-term expansion plans.
Is Nanofilm a Buy Now?
According to DBS Research, it maintains its buy on Nanofilm while Citi Research upgraded its rating to buy from neutral.
What is the Nanofilm Business?
NanoFilm is the leading nanotech solution in Asia that leverages proprietary technologies while providing nanotechnology solutions across various industries.
Who is NanoFilm’s Most Significant Customer?
The company’s biggest customer is a well-kept secret, but it is speculated to be a big phone company.
What is NanoFilm IPO Price?
Since NanoFilm’s debut on the market, with an IPO price of S$2.59, its price has almost tripled to a high of S$6.53 and then retreated.
You may also be interested in Genting Singapore share & Sheng Siong Share
Closing
NanoFilm Technologies currently has a market cap of S$2.8 billion. It has specialized in making thin films, a particular layer placed in rubber, plastics, and ceramics to protect them from scratches. In the recent past, the company has produced tens of revenue, which has increased from the previous years, making it a great option to invest in.
Key Takeaways
- NanoFilm Technologies was started in 1999 by Nanyang Technology University.
- The NanoFilm stock is considered a growth stock.
- NanoFilm has a considerable concentration risk since most of its revenue is from one customer.
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