[%mBjk%] 
Research by HLIB
BUY – TP RM2.74

" Weighed by forex woes”

Notion’s share price has fallen sharply from its recent peak due to (i) the sharp appreciation of the ringgit; and (ii) brokers imposing cash upfront requirements, which dampened sentiment. The ringgit's strength is poised to weigh heavily on the group’s financials resulting in substantial forex losses (non-core) in the coming quarter which might not reflect the true picture of its robust operations. Looking ahead of this forex impact, the company’s near-term outlook remains solid, with promising sales volume growth anticipated across its HDD, EMS, and automotive segments throughout the remaining of FY24 and FY25. While we maintain our earnings forecasts, we trim the assigned P/E ratio to 25x (from 30x) to reflect the subdued sentiment surrounding export-oriented companies in view of the less favourable forex. Consequently, we have lowered our TP to RM2.74 (from RM3.28) but maintain our BUY rating.  

Analyst:
Tan J Young
[%LYoy%]

$KLSE-NOTION 
Research by HLIB
BUY – TP RM2.74

" Weighed by forex woes”

Notion’s share price has fallen sharply from its recent peak due to (i) the sharp appreciation of the ringgit; and (ii) brokers imposing cash upfront requirements, which dampened sentiment. The ringgit's strength is poised to weigh heavily on the group’s financials resulting in substantial forex losses (non-core) in the coming quarter which might not reflect the true picture of its robust operations. Looking ahead of this forex impact, the company’s near-term outlook remains solid, with promising sales volume growth anticipated across its HDD, EMS, and automotive segments throughout the remaining of FY24 and FY25. While we maintain our earnings forecasts, we trim the assigned P/E ratio to 25x (from 30x) to reflect the subdued sentiment surrounding export-oriented companies in view of the less favourable forex. Consequently, we have lowered our TP to RM2.74 (from RM3.28) but maintain our BUY rating.  

Analyst:
Tan J Young
jytan@hlib.hongleong.com.my