Jinwu Financial News | Xiniu Securities released a research report saying that in fiscal year 2023, Benjakoda (01665) achieved total revenue of about RM690 million (Malaysian currency), an increase of 15.2% over the previous year, and its net profit increased by about 6.7% over the same period last year, which is in line with our expectations. The automotive business segment continued to be the Group's main contributor, accounting for about 47.6% of the Group's total revenue, while the medical business segment increased sharply by 75.2% year-on-year to RM150 million. Thanks to the growth of Factory Automation Solutions (FAS) in the medical business segment, the Group's gross margin increased to 31.9% in the fourth quarter, driving the annual gross margin and net profit margin back to 30.3% and 20.6%, respectively.
According to the bank, the contribution of the company's medical business division is particularly significant, and the visibility of important customer orders remains clear, becoming the main driving force for the group. Based on the Group's current orders, the Healthcare Business Division is expected to maintain strong growth this year. Meanwhile, based on the latest expansion plans from major customers, we expect the Healthcare Business Division to maintain ideal results over the next two years.
The bank continued that we cut Benjakoda's profit forecast by about 10% while lowering the target price to HK$1.18 per share to reflect the uncertainty experienced by the automotive business segment, which is the main source of revenue. However, the visibility of the medical business segment remains clear, and we expect the medical business segment to be the Group's main growth driver this year, partially offsetting the impact of the slowing growth of the automotive business segment. As a result, we maintain the Group's “buy” rating, and future orders are one of our priorities.