Atech top pick in electronic manufacturing

PETALINGJAYA: Aurelius Technologies Bhd (Atech) stands out as an electronic manufacturing services pick, despite growing fears of a global recession, says Maybank Investment Bank (Maybank IB) Research.

It is underpinned by the group’s more resilient customer portfolio with exposure to industrial electronic products and an inorganic growth strategy, it added.

“We came away from Atech’s recent investors’ briefing feeling positive,” the research house said in its report.

The easing of global supply chain disruptions and component shortage situations also bodes well for the company and relieves some of its systematic pressures.

It also allows the group to focus on improving its internal operations, such as account management, expansion, customer acquisitions and cost management.

Maybank IB Research said it liked Atech for its robust earnings growth prospects, growing exposure to higher value-added multi-component integrated circuits, as well as its operational resilience, underpinned by its strategy to grow its wallet share with regards to existing customers.

“We maintain our ‘buy’ call and forecasts on the company with a target price of RM2.07,” it added.

The group is ramping up its capacity in the second quarter of financial year 2023 (2Q23).

“The capacity for Customer F has increased to five surface-mount-tech lines and 12 automated-backend,” it said, adding that the current utilisation rate for Customer F is estimated at 5%.

The research house said: “We are projecting production for Customer F to double by the end of 2023 or early 2024, compared with 2Q23 production volume.”