Amid the dearth of mega IPOs and a slew of delisting in SGX mainboard, Nanofilm Technologies’ explosive debut on 30 October 2020 certainly created a mighty buzz among Singapore investment community. In my memory, the last home-grown company that had debut with such fanfare was NetLink NBN Trust in 2017. Question now: is Nanofilm (MZH) share price overvalued?
Indeed, Nanofilm (MZH) share price made a strong start with an opening price of $2.77 and an intra-day high of $3.02. With solid support from a stellar group of institutional investors like Temasek Holdings, AIA, Credit Suisse, investing in this company seems like a no-brainer. Or is it so? Admittedly, I had been keen to invest in this stock but a review of its financial performances made me think that Nanofilm (MZH) share price could be grossly overvalued.
Before examining the valuation of Nanofilm (MZH) share price in details, let me give a brief overview of the company’s profile. Nanofilm is a nanotechnology solution provider with three business units – advanced material surface solutions, production and supply of nanoproducts and manufacture of industrial equipment. Nanofilm’s solutions can be adaptable for use in smartphones, automotive, printing, computers and wearables.
A look at the financial performance revealed that Nanofilm is a fast-growing company, with revenue increasing from $104 million in FY2017 to $143 million in FY2019. Net profit increased from $26.9 million to $35.8 million. Now, here’s the thing. Even though this is a growing company with healthy track record of profits, the current market capitalization is a staggering $3.2 billion. Based on this, I do think that Nanofilm (MZH) share price is being traded at a slightly high premium.
Indeed, since hitting a high of $5.30 on 20 January 2021, Nanofilm (MZH) share price went soft and fell to $4.80 as of 5 March 2021. Despite delivering a stellar set of FY2020 financial results, Nanofilm (MZH) share price did not fly. Part of the reason could be due to broad market sentiments. In this article, I will share my insights on the outlook for Nanofilm (MZH) share price in 2021.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested in Nanofilm (MZH) share currently. Whether Nanofilm (MZH) share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
Key competitive edge of Nanofilm (MZH) share price
Despite the correction in technology stocks in recent months, the big boys had been increasing their stakes in Nanofilm. Temasek Holdings’ Tembusu Capital had increased its stake in Nanofilm from 5.67% to 6.09% on 20 January. In March 2021, the US’ Capital Group increased its’ stake from 5.99% to 6.26%. The confidence of the institutional players in Nanofilm (MZH) share price could be due to the competitive edge of Nanofilm, which [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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