PETALING JAYA: SFP Tech Holdings Bhd made a strong debut on the local exchange yesterday with its maiden trading day share price closing at a 37 sen or 123% premium to its offer price of 30 sen a share.

       The tech company’s share price hit a high of 70 sen and low of 59 sen in intraday trade before closing at 67 sen a share. The stock was the most actively traded counter on the exchange yesterday.

       SFP’s prospects look bright over the next few years, thanks to its strong foothold in the semiconductor, electrical and electronics (E&E) and solar photovoltaic (PV) businesses.

       Another feather in the cap according to analysts that would fuel the company’s revenue and earnings streams in the medium would be the sturdy growth projected in the engineering support industry (ESI) besides its aggressive expansion drive.

       Hong Leong Investment Bank Research (HLIB) said going forward, it projects SFP Tech’s profit to further grow significantly by 36%, 15% and 17% for financial year (FY) 2022 to 2024 respectively – signifying back-to-back record high profits annually, based on the research house’s forecasts. This represents an impressive FY21-24 compounded annual growth rate (CAGR) of 22%.

       It believes the home-grown engineering supporting service provider is a compelling case given its strong foothold in the

       semiconductor, E&E and solar PV spaces. The research house is initiating coverage on the company with a “buy” recommendation and a target price of RM0.63 sen a share.

       According to Protege Associates (an independent market research and business consulting company), the Malaysian ESI is projected to grow at a sturdy CAGR of 8.9% to a total market size of RM11.7bil from 2022-2026.

       Global efforts in boosting vaccination rate is also expected to stimulate economic recovery, which would promote the recovery of the ESI in the country.

       SFP Tech is an integrated engineering supporting service provider with a range of services from fabrication process, computer numerical control (CNC) machining and mechanical assembly.

       As part of its aggressive expansion plans, the company is in the process of constructing manufacturing plant 3 – which would comprise a three-storey factory and warehouse with a three-storey office building with a built-up area of approximately 319.2k sq ft (which essentially triples the group’s total current built-up area of 152.5k sq ft).

       This is to house additional machines to produce more complex, higher precision and higher mix precision-machined components, as well as to increase production capacity to cater to the increasing demand for the group’s engineering supporting services.

       The manufacturing plant would be utilised for its CNC machining activities. The construction of the plant is expected to be completed in 2QFY22 and be fully operational by 4QFY22.