Pentamaster to continue riding on growing auto, medtech sectors

PETALING JAYA: AmInvestment Bank Bhd Research remains positive on Pentamaster Corp Bhd’s long-term prospects, as the company is expected to continue riding on the revenue momentum of the automotive and medical technology (medtech) sectors.

“We believe that both the automotive and medtech segments will be able to cushion the slowdown in the electro-optical and consumer electrical/industrials products segments due to the soft consumer sentiment,” the research house said.

AmInvestment said the company will focus on expanding its footprint in Japan and Germany to provide silicon carbide (SiC) wafer burn-in equipment as both countries are the leaders in high-end automotive technology.

The company also leverages on its i-ARMS to provide automated solutions which streamline clients’ operational efficiency and support medical services.

However, the research house maintained a “hold” call on Pentamaster with an unchanged fair value of RM5.50 per share based on the financial year 2024 (FY24) price earnings of 32 times.

It also maintained FY23 to FY25 earnings as the nine-month FY23 core net profit of RM73mil came within expectations, accounting for 77% of AmInvestment’s full-year forecast and 72% of consensus estimates.

Pentamaster registered a 15% year-on-year (y-o-y) rise in its nine-month FY23 revenue mainly due to stronger sales from the automated test equipment (ATE) and factory automation solutions (FAS) divisions.

On a quarter-on-quarter (q-o-q) basis, Pentamaster’s third-quarter FY23 revenue grew 2% to RM180mil due to stronger FAS sales (up 2.2 times q-o-q), which cushioned the decline in ATE revenue (34% q-o-q).

In the third quarter ended Sept 30, 2023, its net profit rose to RM23.5mil from RM20.07mil a year ago on the back of higher revenue of RM180.74mil versus RM155.59mil.

On a nine-month basis, its net profit jumped to RM68.42mil from RM59.67mil a year ago while revenue increased to RM522.93mil from RM452.96mil.