In a report released yesterday, Ling Lee Keng from DBS upgraded Aztech Global Ltd. to a Hold, with a price target of S$0.66.
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Ling Lee Keng has given his Hold rating due to a combination of factors impacting Aztech Global Ltd. The company’s core strengths in research and development, design, engineering, and manufacturing have historically supported healthy net margins above 10%. However, recent slowdowns in order momentum from a key customer caused net margins to drop below this level, although there are signs of improvement in the second quarter of FY25.
Despite a strong rebound in order momentum in 2QFY25, the recovery is still considered fragile and depends heavily on execution. The company’s strategy to diversify its customer base has shown progress, with the addition of new products and clients, which is expected to gradually improve the order book. While the target price has been increased to SGD0.66, reflecting an optimistic outlook for the second half of the year, a sustained re-rating will require stronger order wins and stable margins.
Lee Keng covers the Technology sector, focusing on stocks such as Aztech Global Ltd., Frencken Group Limited, and UMS Holdings. According to TipRanks, Lee Keng has an average return of 8.9% and a 55.56% success rate on recommended stocks.
In another report released today, UOB Kay Hian also maintained a Hold rating on the stock with a S$0.58 price target.