DBS Group Research is upgrading its call on diamond tech company Sarine Technologies to “hold” from “fully valued” with a higher target price of 50 cents from 45 cents previously.
On May 15, Sarine announced its 1QFY2022 ended March business update, which highlighted that the group experienced no material impact from the geopolitical uncertainties during that period. Sanctions notwithstanding, the flow of rough diamonds into the value chain, including those of Russian origin, continued unabated in 1QFY2022, with the midstream polishing activities commensurately robust, exceeding 100,000 stones daily.
On the back of these, the group’s revenue for 1QFY2022 came in 9.9% lower y-o-y at US$15.6 million, while gross margin stood at 71.8%. The group notes that 1QFY2021 was an exceptionally strong quarter.