PIE’s customer pipeline still looks promising

PETALING JAYA: PIE Industrial Bhd’s customer pipeline remains encouraging and could lift future earnings, even though some research houses are cautious on execution given its onboarding timelines.

The contract electronics manufacturer is cautiously optimistic volumes could normalise back to levels seen early this year once US customs issues are resolved, while key customers from other segments remain relatively stable.

Maybank Investment Bank Research said management guided for a modest improvement quarter-on-quarter, with the worst case scenario being “flat” for the company’s fourth quarter performance.

Kenanga Research revised its forecasts downwards for PIE’s net profit for this year and next year by 44% and 17%, respectively, reflecting lower net margin assumptions of 3.3% and 4.8%, respectively.

PIE’s recent earnings weakness largely stemmed from a key supercomputer customer diverting production out of South-East Asia to circumvent tariff issues.

The research house reduced its target price to RM2.80 a share from RM3.37 and maintained its “market perform” call.