Greatech targets RM647mil in new orders

PETALING JAYA: Greatech Technology Bhd is targeting to secure RM647mil in new orders for the remainder of this year.

The automation solution provider has an order book of RM610mil, which can last until the first half of 2024, according to UOB Kay Hian (UOBKH) Research.

It said Greatech had secured RM72mil worth of new orders from its life science customers, on top of the strong traction from its US incumbent solar customer following its massive expansion plans in Ohio, India and Alabama.

The research house said 59% of the current order book came from solar and 24% from electric vehicle customers. The rest were contributed by life science (16%) and semiconductor automation (1%).

According to UOBKH Research, the group’s expansion is on track and it was scouting for land to support aggressive uptake from the solar and life science customers.

“On the group’s ambitions in spearheading both automation advancement as well as vertical integration for its four key segments, management is currently exploring the most cost-effective collaborations for synergy integration in technology advancement and market expansion beyond the United States.”

The research firm said it expected a stronger second half of 2023 (2H23), on the back of margin normalisation and higher revenue contribution from the solar segment.

“Greatech reported core net profit of RM40mil for the second quarter of 2023, bringing 1H23 core net profit to RM74.3mil, which made up 41% and 39% of our and consensus estimates, respectively.

“The results were within expectations as 1H23 made up 42%, 62% and 43% of its full-year earnings for the past three years, respectively,” it said.

Meanwhile, its 1H23 revenue increased 27% year-on-year, mainly driven by capital investment plans from its solar customer and commercialisation of a new production line for the life science segment.

Net profit margin improved marginally by 0.8 percentage points to 26.6%, with better product mix and higher foreign exchange gains offset by higher employee expenses and higher taxation, it said.

Hence, core net profit increased by 31%, it added.