Maybank IB Research said Greatech’s latest acquisition has significant long-term potential.
PETALING JAYA: Greatech Technology Bhd
is set to strengthen its market position following a recent strategic acquisition aimed at enhancing its capabilities in higher value-add process automation.
The company’s fundamentals remain robust, enabling it to capitalise on ongoing trends in global Industry 4.0 and factory automation.
In its report, Maybank Investment Bank (Maybank IB) Research said Greatech’s latest acquisition has significant long-term potential.
“We opine that Greatech’s recent acquisition from a distressed seller has the potential to accrete long-run value as it diversifies exposure towards higher value-add process automation,” the research house stated.
The research house upgraded Greatech to a “buy” call, maintaining an unchanged target price of RM1.95 a share.
This valuation is based on a 26 times 2026 estimated price-to-earnings ratio (PER), which reflects a one standard deviation discount to its five-year mean.
Despite uncertainties stemming from US tariff disputes, Maybank IB considers these risks largely priced in.
“With a weaker outlook from US tariff tiff uncertainties largely priced in, we upgrade Greatech to ‘buy’,” it added.
On Feb 28, 2025, Greatech announced the acquisition of Manz Slovakia SRO (MSSRO) for €1mil.
MSSRO, a profitable contract manufacturer of standardised and custom equipment, recorded €744,000 in earnings for 2024.
Maybank IB viewed the deal positively, stating: “With an acquisition multiple of just 1.3 times 2024 earnings, we view the acquisition favourably.”
The research house believes this strategic purchase will support Greatech’s ambition to move up the value chain from factory automation to process automation and mechatronics.
Furthermore, MSSRO’s presence in Europe will enhance Greatech’s access to EU-based customers.
Greatech has made its second European acquisition in 18 months with this transaction.
In the fourth quarter of 2023, Greatech acquired Ireland-based Allied Automation for €1mil.
This deal proved successful, contributing approximately €7mil to Greatech’s revenue in 2024.
Despite some setbacks in 2024, Greatech’s outstanding order book remained healthy at RM785mil as at Feb 13, 2025.
This backlog is sufficient to sustain its operations for the next year.
While Greatech fell short of its internal order book target last year, management remains optimistic about securing RM900mil in new orders for 2025, driven primarily by demand from the solar and e-mobility sectors.
Additionally, the medical segment is projected to deliver revenue growth exceeding 50% in 2025.
Maybank IB also sees value in Greatech’s current share price following a recent 30% year-to-date (y-t-d) decline amid broader technology sector sentiment concerns.
“We believe value has emerged following the sentiment-driven correction afflicting the technology sector that has seen Greatech’s share price retrace 30% y-t-d,” it noted.
At present, Greatech trades at 21 times its 2026 PER, notably lower than its five-year forward mean of 39 times.
Regarding potential US tariff concerns, the research house is confident that Greatech’s contractual safeguards will mitigate risks.
“Accounting for the potential imposition of blanket tariffs on Malaysia, we take comfort that Greatech may be able to pass on near-to-medium term marginal cost increases to its customers, owing to force majeure caveats,” Maybank IB said.
