PETALING JAYA: ACE Market-bound machining specialist Ambest Group Bhd is set to record double-digit revenue growth over a three-year period, bringing its core profit close to RM10mil by next year.
In a note to clients, TA Research said Ambest’s earnings would grow on the back of its expansion plans and a favourable industry outlook.
This would lift core profit to RM9.8mil next year from RM7.1mil in 2024.
The research house forecast revenue growth of 12% for last year and projected further increases of 14% this year and 16% next year.
Ambest primarily serves semiconductor clients requiring high-precision engineering.
Post-initial public offering (IPO), Ambest’s expansion plans include increasing the built-up area of one of its facilities in Bayan Lepas, Penang.
“The group plans to increase the built-up area of the facility from 2,010sq m to 2,910sq m. This expansion will enable the group to enlarge its manufacturing space, accommodate additional machinery and equipment, and enhance its production capacity and capabilities,” TA Research said.
Ambest is scheduled for listing on Bursa Malaysia’s ACE Market on Feb 6, and aims to raise approximately RM27.5mil through its IPO.
The group plans to allocate RM12mil to repay bank borrowings, primarily from the acquisition of its factory.
In line with its positive industry outlook, TA Research pointed out the domestic market is expected to remain the group’s primary revenue contributor.
According to an independent market research report prepared by Protégé Associates, which was enclosed in the IPO prospectus, the engineering support services market in Malaysia was valued at RM12.5bil in 2024, up from RM10.2bil in 2023.
TA Research has assigned a price-earnings multiple of 20 times for Ambest’s earnings next year, for a fair value of 38 sen per share based on the group’s strong track record in precision machining, long-term relationships with clients, and experienced management team.
