PETALING JAYA: Genetec Technology Bhd
could return to profitability in the financial year ending March 31, 2027 (FY27), although the pace of its recovery will hinge on new order replenishment and the conversion of potential opportunities into firm orders, according to CIMB Research.
The research house said it was cautiously optimistic on Genetec’s FY27 prospects, underpinned by potential new orders from its existing North American and e-mobility customers.
Genetec remained in the red in the fourth quarter of FY26 (4Q26), recording a slightly narrower core net loss of RM14.2mil compared with RM14.5mil in 3Q26, mainly due to lower finance costs and tax expenses.
Revenue rose 8.8% quarter-on-quarter to RM22.3mil, marking its first sequential improvement in 18 months since 4Q24.
For FY26, Genetec posted a core net loss of RM134mil, reversing from a core net profit of RM7.3mil in FY25 as weaker order fulfilment and elevated operating costs weighed on earnings.
Cost pressures remained elevated due to higher installation and freight expenses following its earlier reliance on US-based subcontractors and air freight to meet delivery timelines for a North American customer.
CIMB Research said Genetec’s ongoing customer and sector diversification was positive, although near-term visibility remained limited as new engagements had yet to translate into firm orders.
The group continues to pursue opportunities in adjacent automation segments and energy while maintaining discipline over project returns, execution risks and resource allocation.
Successful conversion of these opportunities could broaden Genetec’s revenue base, reduce customer concentration and strengthen its longer-term earnings resilience, the research house said.
CIMB Research maintained its “reduce” call on the counter but raised its target price to 21 sen from 14 sen, based on 0.5 times price-to-book value, which is one standard deviation below Genetec’s five-year mean.
It also raised its FY27 to FY28 earnings per share forecasts by 1% to 3% following adjustments incorporating the group’s completed FY26 performance.
“Downside risks include weaker-than-expected order replenishment, delays in new contract awards and further appreciation of the ringgit against the US dollar,” it added.
It said upside risks include stronger orders, improved margins as assembly programmes stabilise and successful diversification into electric vehicles, consumer electronics, medical devices and battery energy storage markets.
