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PhillipCapital downgrades Micro-Mechanics to 'neutral' on priced-in positives

Felicia Tan
Felicia Tan2/11/2021 11:41 AM GMT+08  • 2 min read
PhillipCapital downgrades Micro-Mechanics to 'neutral' on priced-in positives
Micro-Mechanics, on Jan 29, reported a record quarterly revenue of $18.7 million for the 2QFY2021 ended December.
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PhillipCapital’s head of research Paul Chew has downgraded his recommendation on Micro-Mechanics Holdings to “neutral” from “accumulate” on stretched valuations.

Chew has, however, upped his target price on the counter to $3.35 from $2.93, as he increases FY2021 ex-cash price-to-earnings (P/E) from 18 times to 21 times, in line with its peers.

“Recent share-price rally has priced in its positive outlook and long-term merits such as 4% yields, 35% ROEs and a net-cash balance sheet,” says Chew on the recommendation downgrade in a Feb 8 report.

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