PETALING JAYA: Pentamaster Corp Bhd
appears well placed to sustain its earnings momentum as rising automation demand across medical technology, artificial intelligence (AI) and advanced semiconductor applications supports a growing pipeline of higher-value projects.
A record order book and improving margin outlook are also reinforcing expectations for stronger performance into the second half of financial year 2026 (2H26) and beyond.
RHB Research remains bullish on Pentamaster’s prospects, maintaining its “buy” call while raising its target price to RM6.32 from RM5.04.
The research house said Pentamaster’s 1H financial performance was broadly in line with expectations and it continues to expect a stronger 2H for this year, backed by an outstanding order book of RM550mil.
Highlighting Pentamaster’s compelling long-term outlook, RHB Research said: “We remain positive on Pentamaster, driven by the sustainable growth of its factory automation solutions (FAS) business, fuelled by medical and AI-driven automation demand, alongside expanding opportunities in advanced packaging and power-related test solutions amid the ongoing semiconductor capital expenditure upcycle.”
As such, RHB Research raised its earnings forecasts for Pentamaster for 2027 and 2028 by 25% and 13%, respectively, citing higher order book and margin assumptions, continued strength in FAS and the expected breakeven of its healthcare unit.
It values the stock at 36 times forecast 2027 price-to-earnings.
“The current outstanding order book comprises medical (50%), AI compute (30%), electro-optical (3%), and other applications,” RHB Research noted.
“Within automated test equipment, demand for silicon carbide or SiC front-end wafer burn-in solutions is set to strengthen, particularly for power conversion applications supporting AI and high-performance computing,” it pointed out.
Pentamaster’s various advanced packaging test solutions under the 9 Samurai initiative are also gaining good traction and they are expected to become key growth drivers into 2027.
Meanwhile, UOB Kay Hian (UOBKH) Research maintains its “hold” recommendation but lifts its target price to RM5.20 from RM4.20 after rolling forward its valuation. It believes the stock’s strong rebound has largely reflected improving sentiment.
“The stock has staged a notable rebound from its March trough of RM2.84, underpinned by improving industry sentiment and sustained optimism surrounding AI-driven demand.
“Following this sharp recovery, we are of the view that the current valuation is fair as it presents a balanced risk-reward profile.”
Nevertheless, UOBKH Research highlighted the quality of Pentamaster’s order book, saying it grew 15% quarter-on-quarter to RM550mil, led by AI compute and medical projects that should remain the group’s key growth engines in 2026.
The research house also expects sustained opportunities from advanced packaging technologies as demand accelerates for AI, high-performance computing and other data-intensive applications.
Phillip Capital Research also keeps its “hold” call with an unchanged target price of RM4.10, pending further clarity on the timeline for the group’s new tax incentive application.
The research house said earnings forecasts remain unchanged for now, although its recommendation is under review.
It pointed out that the enlarged RM550mil order book is concentrated in the medical and AI compute segments and continues to view the medical, electro-optical and automotive businesses as Pentamaster’s principal growth drivers.
For context, Pentamaster posted a 63.9% jump in net profit to RM19.03mil for the second quarter ended June 30, 2026, from RM11.61mil a year earlier, supported by stronger FAS demand, lower administrative expenses and foreign exchange gains.
First-half net profit rose 49.8% to RM36.96mil as revenue increased 30.65% to RM361.22mil.
One analyst told StarBiz that Pentamaster’s prospects appear positive due to a strong order pipeline and broad exposure to AI-related applications.
