Company Name: AMTEK ENGINEERING LTD
| Research House: Kim Eng | Price Call: BUY | Target Price: 1.09 |
Maybank Kim Eng initiated coverage of Singapore’s precision engineering firm Amtek Engineering with a buy rating and a target price of $1.09.
Amtek shares were up 3.5% at $0.74, and have gained 25% so far this year.
However, Amtek’s shares are still below their initial public offering price of $1.30, and Maybank recommended investors to accumulate the shares, as earnings are expected to recover from the middle of this year.
Although Amtek trades at lower valuations compared to its other contract manufacturing peers, the company stands out for its high return on equity and dividend yield, as well as the potential for margin expansion, said Maybank.
“A conscious effort to focus on high margin business segments could translate into opportunities for margin expansion for Amtek,” the broker said.
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