The research house, which has a "buy" call and fair value of RM3.34 on the stock, said the customer aims to double its product portfolio by 2025, expand its existing product categories and venture into new areas such as artificial intelligence, robotics and batteries.
"We believe this would benefit ATA due to the group’s position as the main customer’s largest contract manufacturer globally, producing the broadest range of products.
"Besides this, ATA was recently awarded its third project for its key US customer to produce a yet-to-be-launched full-sized machine, which is currently undergoing test runs, while its 1st and 2nd projects have been running since 3QCY20 and 2QCY21 respectively," it said.
Meanwhile, the group remains in discussion to secure a new ODM project for the customer.
On capacity, ATA's 228,000 sq ft factory and 150,000 sq ft warehouse in Pasir Gudang are both operational with the factory expected to be fully utilised by mid-2021.
The group is also on the lookout for a new factory to cater for growth in customer orders.
In FY22, ATA's growth is expected to be mainly driven by order growth for both its main customer and key US customer.
The group is also aiming for a more diversified customer base, with projections that its main customer will contribute 70% of its top line while the remaining 30% would come from other customers.
AmInvestment has maintained its "overweight" recommendation on the EMS sector.
However, it cautioned there may be a downgrade in the event the pandemic weakens global economic conditions, labour issues arise due to costs and shortages, there is a sudden loss of orders or key customers or a worsening performance in overseas operations due to a longer-than-expected recovery in sales orders.