Aztech Global (SGX:8AZ) saw its stock plummet by 3.05% in Friday's trading session, as investors reacted to concerns about the company's financial performance and growth prospects. The electronic manufacturing services provider has been facing challenges in maintaining its profit margins, which could impact its future earnings and dividend sustainability.
According to recent financial analysis, Aztech Global's net profit margin has declined to 9.2% from 11.3% last year, indicating increased pressure on the company's operational efficiency. While earnings are projected to grow by 7.1% annually, outpacing the Singapore market average of 6.6%, the combination of margin compression and slower revenue growth of 1.4% per year has raised questions about the sustainability of the company's performance.
Despite trading at a discount to its estimated fair value and having a lower Price-to-Earnings ratio compared to peers, investors appear to be focusing on the potential risks. The market's negative reaction suggests growing concerns about Aztech Global's ability to maintain its dividend strength and achieve consistent financial performance in the face of these challenges.