Cnergenz jumps over 12% to hit record high of 99.5 sen, 72% premium over IPO price

Cnergenz jumps over 12% to hit record high of 99.5 sen, 72% premium over IPO price
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KUALA LUMPUR (Aug 22): The share price climb of Cnergenz Bhd, which was listed on the ACE Market on May 24, is gaining momentum. The stock gained more than 12% in early trade to a record-high 99.5 sen after the release of its second quarterly result last week.

At 10.37am, the counter was among Bursa Malaysia’s top gainers as it was up 12.43% or 11 sen to 99.5 sen — a 71.55% premium over its initial public offering (IPO) price of 58 sen. It then retreated to 97 sen an hour later.

Its trading volume swelled to 42.59 million shares as at 11.30am, making it the most actively traded stock on the bourse.

For the six-month period ended June 30, the Penang-based electronics manufacturing solutions provider achieved a cumulative net profit of RM12.94 million on revenue of RM113.48 million. Earnings per share (EPS) came in at 3.09 sen, according to the bourse filing last week.

Based on a back-of-the-envelope calculation, the average EPS for the past two quarters is 1.545 sen.

Using the average EPS as a yardstick, its annual EPS would be at roughly 6.18 sen should Cnergenz’s performance remain as good as in the first six months. Based on the share price of 97 sen, the stock will be trading at a price-earnings ratio of 15.7 times.

According to Cnergenz chief executive officer Lye Yhin Choy, as of June 30, 2022, Cnergenz had secured purchase orders totalling RM72.6 million, out of which RM61.16 million are expected to be fulfilled by end-2022 and RM11.44 million are expected to be fulfilled by end-2023.

Cnergenz posted a net profit of RM9.3 million for the second quarter ended June 30, 2022 (2QFY22), on revenue of RM76.58 million.

The company said the solid earnings were underpinned by higher sales of standalone surface mount technology (SMT) machines and the provision of integrated solutions due to continued demand from manufacturing activities in the electronics and semiconductor (E&S) industries.

“On a segmental basis, standalone SMT machines and equipment sales contributed 51.03% of the total revenue while provision of integrated solutions contributed 44.85% for 2QFY22,” it said.

Commenting on its prospects, Lye said the company believes that the inflow of orders will continue to grow following the recent global uptick in sales of semiconductors, particularly during the second quarter of 2022, coupled with the continued demand for its solutions and products amongst industry players within the E&S industries.

“On the operational front, we have entered into a conditional sales and purchase agreement with the Penang Development Corp for the acquisition of a parcel of industrial land in Penang.

“Upon completion of the acquisition, we intend to embark on the construction of our new facility by channelling our IPO proceeds, which will enable us to scale up our operations, develop and market a wider range of smart manufacturing solution offerings,” Lye said in a statement.

Kathy Fong