Nanofilm shares jump as much as 39.2% on increased revenue, profit margin

[SINGAPORE] Shares of deep-tech company Nanofilm Technologies International surged on Thursday (Apr 23) after it reported a 24 per cent year-on-year increase in revenue to S$55 million for its first quarter.

The counter rose as much as 39.2 per cent or S$0.40, touching S$1.42 at 3.09 pm after 62.3 million shares changed hands.

Nanofilm said that its operating expenses rose in line with revenue growth in Q1, though its operating expenditure-to-revenue ratio declined.

Margins improved on the back of higher revenue and better cost control during the period, it added. Gross profit margin came in at 39 per cent in Q1, up from 27 per cent a year earlier.

Earnings before interest, tax, depreciation and amortisation margin rose to 26 per cent, compared with 12 per cent in Q1 2025.

“Earnings trajectory remains firmly upward”, noted DBS analyst Lee Keng Ling in a Thursday note, adding that “diversified demand pipelines and semiconductor uptick support sustained operating leverage”.

Revenue growth was led by consumer advanced materials under Nanofilm’s advanced materials business unit, which remained the largest revenue contributor and accounted for 89 per cent of revenue in Q1.

Within the unit, consumer advanced materials’ revenue grew 32 per cent year on year to S$34 million, driven by “strong performance in key product segments”.

Industrial advanced materials, meanwhile, increased 9 per cent to S$15 million, largely supported by “improved contributions from the European business”.

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The industrial equipment business unit revenue rose 52 per cent to S$2 million, while the nanofabrication business unit expanded 20 per cent to S$3 million.

Still, growth was partially moderated by Sydrogen Energy, which contracted 8 per cent to S$0.4 million.

Sydrogen is a wholly owned subsidary of Nanofilm and was a joint venture between Nanofilm and Temasek’s unit Venezio Investments. It focuses on hydrogen production, storage and utilisation.

Nanofilm specialises in advanced coatings, thin-film equipment, nanofabrication and hydrogen fuel cell innovations. It operates offices and facilities in Singapore, Vietnam, China, Japan, India and Germany.

The company’s outlook for FY2026 “remains positive”, said DBS’ Lee, who anticipates continued revenue and earnings growth for all of its key segments.

This is set to be driven by “expanding functional coating adoption, new product introductions and improving end-market demand across semiconductor, automotive and consumer electronics segments”.

The pipeline for new applications – including smart eyewear, health sensing devices, artificial-intelligence data-centre components and robotics – provides “incremental volume visibility and diversifies revenue streams” to reduce earnings volatility over time, he added.

Still, Lee warned that risks such as cyclical demand swings in consumer electronics, execution risks related to the scaling of new applications, and potential cost pressures from materials or labour inflation will be present.