MORNING CALL:11/10/23

PublicInvest thinks ECA Integrated is poised to have a strong year

Transcript

00:00 Happy midweek, it is. ECA Integrated Solutions, after Public Invest paid them a visit and

00:06 walked away confident of the group's prospects for the year. It is keeping its outperformed

00:11 call and RM1.12 target price. Post its analyst briefing, PIVB are increasingly

00:16 confident that the group will end FY23 on a strong note, despite some pushback by end

00:21 customers due to change of design and cautious spending. The group is currently looking for

00:26 a 3-5 acre land bank in mainland Penang to expand its manufacturing floor space. Based

00:32 on PIVB's estimates, the land bank's size would increase its current floor space of

00:36 50,000 sqft or by at least fourfold. The allocated capex is around RM35-40 million.

00:44 Its Standard Platform Vision Inspection Automated Test Equipment, or ATE, has seen technological

00:49 breakthroughs and is expected to clinch repeat orders soon. The group has set a target of

00:54 double-digit growth for its FY24 top line, underpinned by its current book-to-bill ratio

01:00 of more than one times. Automated Test Equipment makes up about 70% of the current total order

01:06 book, mostly to be recognised in FY24. According to Bloomberg, Public Invest is the

01:11 only research house that covers ECA. So based on the RM1.12 target price, this implies a

01:16 possible upside of 47% from its last close.

01:21 [Music]