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 byCGS-CIMB

    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%.