NEX Point Plc. (SET: NEX)’s share has seen its share price rise by approximately 20% in the past three trading days as the company sees rising production and deliveries from 2Q22 onward.
As of May 24, the share price of NEX has risen THB2.00/share, or 12.05%, to close at THB18.60/share, with a trading value of THB593 million.
Mr. Songklod Wongchai, Executive Vice President of FSS International Investment Advisory Securities Co., Ltd. (FSSIA), expects NEX’s production and delivery of electric vehicles, including buses and trucks, to expand significantly from 2Q22 onwards as the manufacturing unit under Absolute Assembly (AAB) returns to full production capability.
FSSIA expects that NEX to secure robust orders for both e-buses and e-trucks in 2022-24; however, the delays in production and deliveries two quarters earlier due to COVID-19 could result in a smaller net profit generated by NEX’s EV venture than anticipated.
In 3Q22, the AAB plant will be fully operational, manufacturing 150-250 e-buses and/or e-trucks per month. Therefore, NEX plans to boost its production capacity to 3,000 units by the end of the first half of 2023 and possibly to 4,000-5,000 units by the end of the second half of 2023, when AAB plans to add one additional 8-hour shift.
Net profit for NEX is expected to turn around in 2Q22 and start to rise markedly by 3Q22 as FSSIA projects AAB and NEX to produce and deliver e-bus and e-truck orders to customers.
FSSIA maintains a “BUY” rating on NEX, but cuts the target price to THB21.60 per share from THB26.00, as a result of a reduction in EPS projections for 2022-24 by -39%, -28%, and +1%, respectively, to reflect the expectation of a lower number of e-buses and e-trucks produced by AAB and sold by NEX in 2022-23 due to production delays.
