[%Rsgp%] 
Research by PIB
Outperform – TP of MYR 0.86

“Riding on Semiconductor Recovery” 

We initiate coverage on QES Group (QES) with an Outperform recommendation. Our TP of RM0.86 is pegged to 26x FY25 EPS, a 10% discount to the industry average of 29x, which we deem justifiable given the i) lower earnings base, ii) relatively small manufacturing earnings compared to its industry peers and iii) higher risk given the low entry barrier for its distribution division. Nevertheless, we think the distribution division can be a two-pronged sword for the Group as the business environment is recession-proof and there is low investment requirement while the turnover period is short. It can provide steady recurring cash flows for the company to drive its manufacturing growth going forward.

Analyst(s):
Chong Hoe Leong
[%opux%]

$KLSE-QES 
Research by PIB
Outperform – TP of MYR 0.86

“Riding on Semiconductor Recovery” 

We initiate coverage on QES Group (QES) with an Outperform recommendation. Our TP of RM0.86 is pegged to 26x FY25 EPS, a 10% discount to the industry average of 29x, which we deem justifiable given the i) lower earnings base, ii) relatively small manufacturing earnings compared to its industry peers and iii) higher risk given the low entry barrier for its distribution division. Nevertheless, we think the distribution division can be a two-pronged sword for the Group as the business environment is recession-proof and there is low investment requirement while the turnover period is short. It can provide steady recurring cash flows for the company to drive its manufacturing growth going forward.

Analyst(s):
Chong Hoe Leong
chonghoeleong@publicinvestbank.com.my