Equity Analysis /
Hong Kong

HK : TK Group (Holdings) Limited - Lower margin for new EV customers

    Ray Kwok
    Ray Kwok

    Technology Analyst

    29 March 2022
    Published by

    2H21 net profit stayed flattish yoy due to GPM erosion from supply chain constraints, higher material costs and logistics costs. Plastics component to remain resilient on strong smart home/wearable. Mold fabrication to suffer from short-term low profitability on EV customer win. Maintain Add. TP falls to HK$3.91 on c.19%/13% EPS cuts in FY22F/23F. TK Group trades at c.6x FY22F P/E, which reflects its slow EPS growth of 10%.