SVI shares reach all-time high following solid 3Q results

One of Thailand’s electronics manufacturing companies, SVI, saw its shares surge to an all-time high on Friday as the second consecutive days of rise, after reporting impressive earnings in the third quarter of 2021.

SVI peaked at 8.90 baht this morning, up 22.76 per cent from its prior closing, before settling around 8.50 baht.

On Thursday, the stock ended the market by rising close to the 30 per cent ceiling of price rise set by the Stock Exchange of Thailand (SET), after the company posted 521 million baht of net profit in the third quarter. 

SVI’s third-quarter net profit was up 109 per cent from a year earlier, and 215 per cent from the second quarter.

According to the statement on the SET, SVI achieved strong results thanks to its key customers bearing the material cost. The statement said that the rise in cost was due to a global semiconductor shortage while the company was able to source materials in the most efficient manner.

SVI president Somchai Siripanyanon explained that communication and network, industrial control, automotive and public transportation, and micro-electronics were key sectors in contributing to sales this quarter.

“Despite the shortages [of semiconductor], the company continues to post near record consolidated sales,” said Somchai.

Analysts at Asia plus Securities rated ‘Buy’ on SVI with the target price of 8 baht.

“3Q21 net profit was much higher than expected,” the analysts said in a note, adding that SVI’s net profit was driven by a jump in gross margin. 

However, the analysts pointed out that the price has already surged in response to strong quarterly earnings. 

“There is not much upside left,” an Asia Plus analyst warned. “Investors should wait until the price tones down.” 

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