GREATEC (0208) GREATECH TECHNOLOGY BERHAD to have another busy year
PETALING JAYA: Greatech Technology, which shot onto the radar amid the semiconductor boom, is expected to have another busy year in 2022.
The Penang-based automation solutions provider continues to secure a sizable order book backlog, while still expecting significant replenishment from both its renewable energy (RE) and electric vehicle (EV) segments.
This, according to UOB Kay Hian, should keep the company occupied next year.
“It is also working on the next alpha growth on automated equipment with medical and semiconductor applications, which would be an earnings stabiliser.
“We expect the group to achieve three-year net profit compounded annual growth rate of 64% in 2022, on a favourable price-earnings ratio of 0.6 times,” the research firm said in a report.
The research firm noted that Greatech secured another RM163mil order book on top of its outstanding RM206mil orderbook backlog as of early-August.
Additionally, it added that Greatech has inked a master equipment purchase agreement recently with First Solar – a global provider of comprehensive PV solar solutions. The contract lasts until end-2025.
All in, the research firm expects the blended job scope to render over 30% net profit margin.
For the highly lucrative medical segment, the group expects earnings contribution from 2022 onwards and UOB Kay Hian believes the equipment could be related to high-precision assembly.The research firm said it understands that the core revenue drivers for 2021-22 will still come from the solar, EV, and life science segments, while for 2023, they will come from the semiconductor segment.
The company is also boosting its capacity and have begun construction for the new RM51mil Batu Kawan III building.
The construction of the factory is slated to be ready for occupancy in May 2022. The plant can accommodate up to 500 employees and is strategically located near Greatech’s two new manufacturing facilities in Batu Kawan.
Given the robust earnings outlook, UOB Kay Hian is maintaining a buy on the stock with a RM8.30 target price.
https://www.thestar.com.my/business/business-news/2021/10/20/greatech-technology-to-have-another-busy-year
