‘Wait and see’ stance for Avi-Tech as it grapples with chip shortage: RHB

RHB Group Research’s Jarick Seet has maintained his “neutral” call on Avi-Tech Electronics after it saw a 41.7% drop in profit after tax & minority interests (PATMI) in its FY2020 ending June 30. 

In a Aug 25 report, Seet gave an unchanged target price of 42 cents, saying that the drop was due to the drop in its high-margin burn-in revenue.

This, in turn, stemmed from the chip shortage in the automotive sector. Seet writes, “we expect the chip shortage to last until 2QFY2022, and prefer to adopt a wait-and-see approach for now. The end of this shortage should be crucial for the recovery of its burn-in business.”