Solid FY25 Rebound but Execution Risks and Valuation Constraints Justify Hold Rating

Ling Lee Keng, an analyst from DBS, maintained the Hold rating on Nanofilm Technologies International Ltd.. The associated price target is S$0.71.

Ling Lee Keng has given his Hold rating due to a combination of factors including solid recent performance but lingering execution risks. The company delivered stronger-than-expected FY25 earnings on the back of a nearly 20% revenue rebound, improving utilisation, and notable margin recovery in the second half as ramp-up inefficiencies eased.

At the same time, the target price of SGD0.71 implies limited upside, with valuation set at about 29 times projected FY26 earnings, which is already near the lower end of its historical range. While the FY26 outlook is supported by diversified growth, a China-plus-one expansion strategy, and operating leverage, there are still material uncertainties around programme transitions, delayed hydrogen-related orders, and the pace of commercialisation for new applications, justifying a Hold stance for now.

According to TipRanks, Lee Keng is a 4-star analyst with an average return of 15.0% and a 58.33% success rate. Lee Keng covers the Technology sector, focusing on stocks such as Tokyo Electron, iFAST Corporation Ltd, and ASML Holding.