We maintain our BUY rating for GDT despite cutting our target price by 23% as we lower our aggregate 2022F-2024F NPAT by 16% and increase our cost of equity from 10.4% to 11.6%.

Weakening demand from developed economies and destocking efforts from customers lead us to cut our aggregate 2022F-2024F revenue by 13%. GDT’s small product order backlog as of end-August 2022 has declined 4% YoY despite 2021’s low base — equivalent to 70% of our old 2022F.

However, we raise our 2022F-2024F GPM from 31.2% to 33.5% as GDT’s H1 2022 profit margins beat our expectation thanks to automation and labor productivity improvements.