KUALA LUMPUR: OSK Research recommends a fair value of RM0.42 per share for Elsoft Research Bhd (Elsoft) on rising demand for smartphones, tablets and ultrabooks and the company’s expectation of more orders for its test solutions from new and existing clients.
Penang-based Elsoft is a provider of testing solutions for the semiconductor and optoelectronic industries.
In a statement yesterday, OSK said the company planned to increase its production floor space from 4,552 square metres (sq m) to 12,913sq m by the first quarter of this year.
“Sitting on solid cash reserves and cash equivalents amounting to RM25 million, the company will fund its expansion without resorting to borrowing,” it added.
Making a comeback, Elsoft’s earnings had been sinking since 2005, predominantly due to the loss of contracts from its customers as well as headwinds from the 2008 to 2009 global financial crisis.
However, its earnings started to turn around in 2010, rebounding by more than 148 per cent year-on-year to RM3.9 million in financial year 2010.
“Currently, it has seen an increase in orders from existing and new clients,” it added. — Bernama