New controlling shareholder and executive chairman Datuk Terence Tea.
MClean Technologies Bhd
is ramping up operations as it eyes inroads in a different sub-segment. By pivoting to serve semiconductor manufacturers, the Singapore-based precision cleaning and surface treatment service provider is positioning itself for future bottom-line growth.
With this planned shift, internal growth projections are set at double-digit figures, with contributions from the semiconductor segment expected to rise to 40% within two years, starting from a small base.
Currently, MClean’s main customers are hard disk drive (HDD) component suppliers and manufacturers, accounting for 90% of revenue.
However, this is expected to change in the coming years as the company rebalances its segmental contributions.
MClean has set its sights on further growth after achieving a remarkable turnaround in its financial year 2024 (FY24), reporting a record-breaking net profit of RM6.2mil and earnings per share of 3.14 sen.
This marks a significant recovery following three consecutive years of losses from FY21 to FY23.
The company’s resurgence is largely attributed to its new controlling shareholder and executive chairman, Datuk Terence Tea, who assumed leadership in July 2024.
Under his guidance, MClean has seen its shares nearly double in value year-to-date, reaching 62 sen per share recently and bringing its market capitalisation to RM151.4mil.
In a recent interview, Tea revealed that he stepped in at a critical juncture when MClean was on the brink of Practice Note 17 status.
Tea tells StarBiz 7: “I know the chief executive officer and the chairman; they are older than me and were quite nice to me. They promised to support me by selling me some vendor shares, believing that my experience would enable me to turn the company around.
“So far, I haven’t failed them. They are pretty happy with the results too. Also, I had kept all their people – in the top management – and this was key for them. But I did a lot of streamlining at the operations level as that is my job,” Tea adds.
The company operates not only in Singapore but also in Malaysia and Thailand.
Regarding the planned strategic pivot, Tea highlights that growth will be driven by increasing volumes in both the HDD and semiconductor segments, with the latter expected to see a significant rise from a smaller base.
While HDDs currently account for 90% of operations, this share is projected to decrease to 50% as the overall base expands.
The HDD segment will continue to grow, supported by demand for artificial intelligence (AI) systems, with companies in this space benefitting from improved budgeting.
Tea notes that its earnings visibility extends to 2028.
In MClean’s latest financial results for the first half of FY25 (1H25), net profit surged nearly five-fold year-on-year (y-o-y) to RM5.88mil, while revenues increased by 12% year-on-year to RM32.08mil.
“Our 2Q25 (second quarter of FY25) results demonstrate disciplined execution and strategic clarity. Revenues increased by 13.3% y-o-y, with gross margins rising from 28.6% to 38.3%, driven by a 10% increase in HDD washing volumes and gains in operational efficiency.
“Plating sales to Dufu grew only slightly, but with expected approvals from Western Digital and Toshiba, we anticipate a significant boost in 2026,” Tea says.
“This, along with stable HDD washing, positions us to achieve our budget profit target this year and another 30% better in 2026 in our view.
“This financial stability gives us the confidence to invest in our semiconductor pivot, which currently constitutes 5% of revenue, with a goal to reach 40% by 2027.
“With no pressures on cash flow, we’re intentionally and sustainably building our next growth engine,” he adds.
The company’s HDD operations are now being upgraded to align with the customer’s roadmap, dedicating the entire 2026 year to renovation and qualification. Approval is expected in 2H26.
“It is expected that HDD washing revenue will increase in 2027. This expansion strengthens our core business and improves our cash flow.
“We have a solid foundation for semiconductor workflows, including front-end and back-end cleaning, as well as plating.”
According to him, the cleaning facility is only used for delabelling and repackaging. The products will be sent back to Singapore for washing.
This planned facility upgrade will increase MClean Malaysia’s effective cleaning capacity by 30% to 35%.
“During the entire 2026, renovation and qualification will be carried out to ensure Seagate’s standards are met. Another HDD maker should be approved in the 2H26. As our HDD segment grows, I expect plating revenue to double after approval. Revenue from expanded HDD washing is expected to begin contributing in the 4Q26.”
Tea says the company needs to adapt quickly to take advantage of semiconductor opportunities.
“Our plan for 2025 involves building strong relationships through non-disclosure agreements and technical evaluations, while our plan for 2026 is to secure vendor listings.
“We expect semiconductor revenue to grow to 40% by 2027, and then we aim for a consistent 20% growth rate,” he says.
Today, the company appears to be benefitting from optimal cost management as well as higher profit margins.
Tea says this was done by introducing recycling programmes, implementing energy-efficient upgrades and renegotiations with its suppliers.
“Operational improvements led by our experienced managers have boosted throughput and reduced waste.
“Our HDD business, including plating, is margin-positive and generates consistent cash flow, enabling us to navigate input cost pressures while continuing to invest in semiconductor capabilities. This positions us to effectively manage costs and drive growth,” Tea says.
