Stock Digest - Supercomnet Technologies Bhd - Overcoming Minor Hiccup

We reckon that net margins may stay in mid-to high teens in 1HFY23 before potentially improving towards slightly above 20.0% in 2HFY23 after the issue of defective products received from its FDA approved supplier resolves. While there were several rounds of selling price revisions last year, we reckon that margins recovery will be challenging due to the elevated copper prices that traded above USD8,000/MT year-to-date vs. USD5,000 6,500/MT level during pre-pandemic.