Broker: Maybank Investment Bank Berhad
Date of Report: June 4, 2025
Aurelius Technologies (ATECH): Riding High on Diversification, Capacity Growth, and IoT Demand
Executive Summary: Positive Momentum and Growth Trajectory for ATECH
Aurelius Technologies Berhad (ATECH) is firmly on an upward trajectory, driven by strong operational performance across its core business segments—Communications & IoT (C&I), Electronic Devices (ED), and Semiconductor Components (SC). With robust demand from both new and existing customers, near full capacity utilization, and strategic expansion plans, ATECH is poised for continued growth. Despite potential headwinds from currency fluctuations, the outlook remains optimistic, supported by ongoing global supply chain diversification and ATECH’s growing expertise in IoT and automotive modules.
Contents
- 1. Business Overview and Analyst Outlook
- 2. Core Segment Performance and Utilization
- 3. New Customer Ramp-Up and Capacity Expansion
- 4. Financial Projections and Key Metrics
- 5. Risks and Considerations
- 6. Valuation, Shareholder Structure & Price Performance
- 7. Key Financial Tables
Business Overview and Analyst Outlook
– Maybank Investment Bank Berhad maintains a BUY call on ATECH, with a 12-month target price unchanged at MYR 3.73, representing a 13% upside from the current price of MYR 3.40. – The target price is based on 21x FY25E EPS, reflecting a premium (+1.5SD) to the sector’s 5-year forward mean P/E, driven by ATECH’s strategic positioning in high-growth segments. – Analyst sentiment is positive following a company briefing, noting operational momentum and a clear path for earnings growth in 2025 and beyond.
Core Segment Performance and Utilization
– Strong growth is projected across ATECH’s three core segments:
- Communications & IoT (C&I)
- Electronic Devices (ED)
- Semiconductor Components (SC)
– Plant utilization rates are a key indicator:
- Plants 1–3: Operating at approximately 90% utilization.
- Plant 5: Currently at 10% utilization but expected to ramp up as new contracts go into mass production.
– The company is experiencing increased demand across all segments, driven by both existing customer loadings and onboarding of new customers.
New Customer Ramp-Up and Capacity Expansion
– ATECH’s long-standing engagement with a new customer is moving to the next phase, with mass production and meaningful revenue contribution anticipated by 3Q25. – For the SC segment, utilization is strong, running at approximately 80–85%. – Installation of customer-consigned infrastructure is underway to support rising demand, with discussions ongoing for additional production lines, especially in Plant 5. – With overall utilization near full capacity, ATECH is likely to expand further, capitalizing on growth opportunities in high-value IoT and automotive modules.
Financial Projections and Key Metrics
ATECH’s financial outlook remains robust, with earnings adjustments reflecting an improved product mix and tweaks for capacity ramp-up timing.
| FYE Dec (MYR m) |
FY23A |
FY24A |
FY25E |
FY26E |
FY27E |
| Revenue |
386 |
604 |
666 |
707 |
767 |
| EBITDA |
53 |
75 |
107 |
117 |
130 |
| Core net profit |
38 |
57 |
74 |
79 |
89 |
| Core EPS (sen) |
9.7 |
14.2 |
17.8 |
19.1 |
21.4 |
| Core EPS growth (%) |
-1.9 |
46.1 |
25.0 |
7.6 |
11.9 |
| Net DPS (sen) |
4.9 |
8.7 |
10.7 |
11.5 |
12.8 |
| Core P/E (x) |
26.7 |
24.6 |
19.1 |
17.8 |
15.9 |
| P/BV (x) |
3.1 |
2.9 |
2.8 |
2.6 |
2.5 |
| Net dividend yield (%) |
1.9 |
2.5 |
3.1 |
3.4 |
3.8 |
| ROAE (%) |
13.7 |
14.9 |
14.9 |
15.2 |
16.0 |
| ROAA (%) |
8.6 |
9.9 |
11.4 |
12.0 |
12.7 |
| EV/EBITDA (x) |
18.4 |
18.3 |
12.9 |
11.6 |
10.4 |
| Net gearing (%) |
net cash |
net cash |
net cash |
net cash |
net cash |
Risks and Considerations
Investors should keep in mind several risk factors that could impact ATECH’s earnings, valuation, and share price:
- Weaker-than-expected demand due to global inflation or geopolitical risks.
- Lower cost pass-through if negotiation leverage with clients weakens.
- Operational disruptions from labor shortages or component supply issues.
- Forex headwinds, particularly MYR strength against USD, which could pressure margins. A 5% USD/MYR depreciation could reduce revenue by ~5% and net profit by ~4%.
- Potential new trade tariffs or unfavorable policy changes.
Valuation, Shareholder Structure & Price Performance
– ATECH’s share price stands at MYR 3.40, with a 12-month high/low of MYR 3.78/2.72. – Market capitalization is MYR 1.4 billion (USD 333 million), with 415 million issued shares and a free float of 17.6%. – Key shareholders:
- Main Stream Holdings Sdn Bhd: 16.1%
- Main Stream Ltd: 17.6%
- EPF: 7.8%
– ATECH has consistently outperformed the Kuala Lumpur Composite Index over the past year, with strong absolute and relative returns.
Key Financial Tables and Ratios
Growth and Profitability Ratios
| Key Ratio |
FY23A |
FY24A |
FY25E |
FY26E |
FY27E |
| Revenue growth (%) |
-20.1 |
56.7 |
10.3 |
5.8 |
9.7 |
| EBITDA margin (%) |
13.7 |
12.4 |
16.0 |
15.9 |
17.3 |
| Pretax margin (%) |
11.9 |
11.6 |
13.9 |
13.4 |
14.8 |
| Dividend cover (x) |
2.0 |
1.8 |
1.7 |
1.7 |
1.7 |
| Current ratio (x) |
2.6 |
2.9 |
3.4 |
3.2 |
3.6 |
| Net gearing (%) |
net cash |
net cash |
net cash |
net cash |
net cash |
Conclusion: ATECH Poised for Continued Success
Aurelius Technologies is strategically positioned to benefit from the ongoing transformation in the global electronics supply chain, with robust growth drivers in IoT, industrial, and automotive electronics manufacturing. With capacity expansion, strong customer momentum, and prudent financial management, ATECH stands out as a compelling investment opportunity in Malaysia’s technology sector. Investors should, however, stay alert to macroeconomic and currency risks that could temper the growth story.
Broker: Maybank Investment Bank Berhad | Date: June 4, 2025
