PETALING JAYA: Pentamaster Corp Bhd
’s earnings for the nine-month ended Sept 30, 2024 (9M24) missed expectations of brokerages due to subdued demand in the automotive segment.
However, its factory automation solutions (FAS) segment presented growth opportunities, particularly in the medical device sector, said RHB Research.
“The 9M24 core net profit of RM63.6mil fell short, making up only 67% and 70% of our and Street’s full-year estimates.
“The automotive segment saw another disappointing quarter, impacted by persistent market headwinds following the recent policies and tariffs announced by the US and Europe on Chinese-made electric vehicles (EVs),” RHB Research said in a report.
According to the research house, Pentamaster expects the performance of its automated test equipment (ATE) segment to remain muted potentially through 1H25 given the ongoing macroeconomic uncertainties.
Additionally, China’s EV market and supply chain have become increasingly competitive and disruptive, limiting the company’s ability to fully capture growth opportunities in the region.
“Despite the bleak outlook for the automotive sector, Pentamaster has identified several key growth opportunities to offset these challenges, particularly the rising demand for advanced packaging in semiconductor manufacturing and the ongoing evolution of optoelectronic devices,” the research house pointed out.
“The group is also implementing key initiatives to streamline its operations and improve efficiencies,” it added.
Meanwhile, PhillipCapital Research said the automotive segment quarterly revenue of RM33mil is a new low -- a level last seen in 2019.
“The 3Q24 revenue declined 12% quarter-on-quarter to RM150mil, as the ringgit appreciated sharply by 13% against the US dollar, strengthening from RM4.72 in June to RM4.12.
“The softer revenue was attributed to reduced ATE shipment volumes amid subdued automotive demand during the quarter.”
Despite this, 9M24 earnings before interest, taxes, depreciation, and amortisation margins rose two percentage points to 24%, driven by favourable revenue mix with increased contributions from the higher-margin FAS segment.
