Acromec's second largest client A*Star, which contributed 20% to FY15 revenue, unveiled an impressive record over last five years, providing a positive readthrough on Acromec's outlook.
A*Star exceeded its target by nearly two-fold to $1.6b (target: $830m) in industry R&D spending across 8,965 projects between Mar '11 to Mar '16, reaffirming Singapore as an attractive R&D destination.
Of the $1.6b, 55% were with MNCs that represented 90% of spendings, including Applied Materials, Rolls-Royce, Nestle, Halliburton and P&G- which is also a client of Acromec.
Going forward, PM Lee Hsien Loong had earlier announced an allocation for industry R&D spending up to 2020 of $19b, close to $3b higher than the allocation set aside for the past five years.
This translates positively for Acromec's growth outlook, given that demand for controlled environments, such as laboratories, will grow in tandem with R&D activities.
The group's established track record will play a pivotal role in winning new projects in an industry with low tolerances for error.
Acromec is currently trading at 10.8x trailing FY15 P/E, close to a 38% discount to average of larger competitors listed in Japan and Taiwan.
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