Mainboard-listed Innovalues set to double profits this year: Maybank Kim Eng

It’s well on the road to a strong recovery.

After years of being stuck in the doldrums, mainboard-listed Innovalues is finally on the wat to a recovery this year, with forecasting a doubling of profits in FY14.

According to Maybank Kim Eng, multi-year expansion lies ahead, as the parts it makes are related to vehicle safety, fuel savings and emission control, features that are being made mandatory across the globe.

“Auto parts production is a very difficult industry to enter but once a critical mass is reached, it is a high-volume business with long product life cycles and stable pricing. Since entering this segment in 2004, Innovalues’ ramp-up has been interrupted by the 2008 financial crisis and 2011 Thai flooding. After almost a decade, it is about to reap the full rewards of its investments,” noted the report.

The report also added that immediate growth should be driven by end-market growth for its automotive customers and Innovalues’ own growing market share among its customers’ supplier base.

“Innovalues’ customers are world-leading OEM makers of safety, fuel-saving and emission control automotive parts, such as Sensata and Hilite. Longer term, it hopes to qualify directly with the branded car makers,” Maybank Kim Eng stated.