Datasonic Group Berhad (Datasonic), a key player in the technology and hardware sector, continues to exhibit promising performance. The company's recent 1QFY25 results reveal a substantial 40.3% year-on-year increase in normalised earnings, reaching RM26.5 million. This impressive growth is attributed to higher revenue and an enhanced profit margin, which has surged to nearly 30%.
MIDF Stock Broking House maintain a BUY recommendation for Datasonic, with a revised target price of RM0.58, up from RM0.53. This adjustment follows the robust performance reported for the first quarter of FY25, which accounted for 27.1% of the projected full-year earnings. The upgrade reflects confidence in Datasonic's ongoing and future growth prospects, particularly in light of the company's expanding global initiatives and new programmes, which are expected to diversify its revenue streams beyond its traditional reliance on government contracts.
Despite the current market challenges, Datasonic's strong performance is underscored by a solid 7.0% year-on-year revenue increase, totalling RM90.8 million. This growth is supported by heightened delivery of smart cards, passport, and personalisation services. The improved profit margin, which has risen from 22.2% to 29.2%, is a result of lower depreciation and amortisation costs, contributing to the overall positive financial outlook.
Furthermore, Datasonic has announced a 1QFY25 dividend of 0.75 sen per share, up from 0.60 sen in the same period last year, reflecting the higher earnings per share achieved. With the current share price hovering around RM0.445, the dividend yield stands at an attractive 6.7%, appealing to investors seeking income in a volatile market.
Looking ahead, Datasonic's future growth prospects remain optimistic. The company's ongoing global expansion and new initiatives are poised to mitigate risks associated with its dependency on government contracts. Analysts remain confident that these strategic moves will bolster Datasonic's financial performance and market position.
Source: MIDF
Title: Quarterly Profit Margin Surged to Almost 30%