PETALING JAYA: Genetec Technology Bhd
’s new orders worth over RM100mil for body panel assembly related to a new autonomous electric vehicle (EV) model for its US based customer, offers an earnings boost this year.
CIMB Securities noted the new order marks Genetec’s maiden expansion beyond battery cells and pack assembly for the American EV client.
“The group expects to commence deliveries for this project in the second quarter of 2025. This contract could potentially span five phases, presenting strong potential for recurring orders.”
With the new contract, Genetec now has an order backlog of RM300mil, split between its United States and European customers while its tender book stands at RM300mil.
The research house added the tender book estimate does not include several new projects, such as a semi-truck assembly programme for its unnamed US customer, a new regenerative braking system for its European customer and a customised battery energy storage systems (Bess)for enterprise applications, which Genetec is particularly optimistic about.
The company is also entering the semiconductor automation segment with a potential maiden project in the second half of the year for a US-based front-end semiconductor production equipment customer with operations in Singapore.
“We see strong long-term opportunities in this space, especially as Genetec’s prospective customer plans to double its Singapore manufacturing capacity in the coming years.
“This expansion presents a compelling avenue for Genetec to establish a foothold in the front-end semiconductor segment, in our view,” CIMB Securities noted.
In total the research house is anticipating RM320mil in new orders for Genetec in financial year 2025 (FY25) and RM360mil in FY26, and has revised up its total order replenishment forecast for FY25 and FY26 to RM680mil from RM450mil.
“We estimate new customer contributions - particularly from the Bess segment - could account for 5% to 10% of group revenue in FY26 to FY27,” it forecasted.
The improved order book has led CIMB Securities to raise Genetec’s FY25 to FY27 earnings per share by 2% to 16% and keep its “buy” call on the counter with a higher target price of RM2.20 a share (from RM1.70).
The price-to-earnings multiple for the revised valuation was raised to 21.3 times from 18 times to reflect Genetec’s improving earnings outlook, driven by its better-than-expected order book replenishment and successful diversification into front-end semiconductor automation.
Genetec shares last closed at RM1.46, giving it a market capitalisation of RM1.1bil.
