Broker: UOB Kay Hian
Date of Report: Monday, 25 August 2025
Greatech Technology Bhd: Robust Growth Prospects Amid Forex Challenges and Sectoral Shifts
Overview: Strong Sector Fundamentals Despite Forex Headwinds
Greatech Technology Bhd, a leading manufacturer of automated equipment ranging from single units to integrated production line systems, continues to demonstrate its resilience and growth potential. Despite facing steeper-than-expected forex losses, the company’s fundamentals remain robust, with a strong orderbook, improving visibility for future orders, and a positive outlook across its core sectors: solar, e-mobility, and semiconductors.
Share Performance and Major Shareholders
Current Share Price: RM1.94
Target Price: RM2.30 (revised upwards from RM2.19)
Upside Potential: +18.6%
Market Cap: RM4,878.8 million
Shares Issued: 2,514.8 million
Major Shareholders:
Gtech Holdings Sdn Bhd: 52.3%
Khor Lean Heng: 5.9%
AIA Bhd: 4.2%
52-Week High/Low: RM2.42/RM1.12
NAV/Share (FY25): RM0.42
Net Cash/Share (FY25): RM0.11
1H25 Financial Results: Solid Revenue Growth, Profit Impacted by Forex
Greatech’s first half of 2025 saw revenue growth driven by increased demand in e-mobility and semiconductor automation, though profits were dampened by forex movements.
| Metric |
2Q25 |
QoQ Change (%) |
YoY Change (%) |
1H25 Total |
1H25 YoY Change (%) |
| Revenue (RMm) |
232.7 |
32.7 |
13.0 |
408.1 |
14.1 |
| Gross Profit (RMm) |
65.3 |
11.7 |
-4.7 |
123.7 |
18.5 |
| EBITDA (RMm) |
37.0 |
-27.0 |
-35.8 |
87.6 |
-9.8 |
| Net Profit (RMm) |
25.9 |
-29.8 |
-46.4 |
62.8 |
-21.9 |
| Core Net Profit (RMm) |
37.5 |
-4.5 |
-25.0 |
76.8 |
-8.2 |
Key Points:
1H25 revenue rose 14% YoY, led by e-mobility and semiconductor Production Line Systems (PLS).
Core net profit fell 8% YoY, mainly due to realised forex losses of RM6.6m, compared to forex gains of RM13.1m in 1H24.
Gross profit margins improved, supported by lower subcontractor costs.
Financial Performance and Valuation Metrics
| Year to 31 Dec (RMm) |
2023 |
2024 |
2025F |
2026F |
2027F |
| Net Turnover |
658.8 |
752.4 |
820.0 |
925.3 |
960.0 |
| EBITDA |
182.2 |
202.9 |
194.0 |
230.9 |
257.9 |
| Operating Profit |
166.8 |
180.6 |
165.6 |
197.0 |
219.3 |
| Net Profit (Rep./Act.) |
154.4 |
155.0 |
143.8 |
169.8 |
189.8 |
| EPS (sen) |
6.7 |
6.1 |
5.7 |
6.8 |
7.6 |
| PE (x) |
29.0 |
31.8 |
33.9 |
28.7 |
25.7 |
| P/B (x) |
6.5 |
5.4 |
4.6 |
4.0 |
3.5 |
| EV/EBITDA (x) |
20.3 |
18.0 |
18.6 |
15.1 |
13.1 |
| ROE (%) |
23.1 |
20.5 |
17.6 |
17.9 |
18.5 |
Operational Highlights and Orderbook Momentum
Outstanding Orderbook: RM608 million (down 19% but remains among the highest in the sector)
Orderbook Coverage: Expected to last until 2H26
New Orders Secured (mid-Aug 25): RM174 million, led by e-mobility and solar clients, along with semiconductor automation/consumer electronics and medical/pharma clients
Order Wins Outlook: Momentum expected to build into 4Q25, with management targeting RM700 million in new wins for 2025, driven by:
Co-development of next-gen solutions with customers
Improved policy clarity
Malaysia’s geopolitically neutral stance
Opportunities from global trade diversion
Segmental Revenue Trends
Strongest Growth: E-mobility and semiconductor sectors (notably in PLS)
Solar Segment: Expected to lead new order flows into late 2025
Medical/Pharma: Contributed to new orders but not the primary growth engine
Earnings Revision and Risk Assessment
2026 Earnings: Upward revision by 5% to reflect higher semiconductor segment wins
Consensus Gap: Earnings estimates remain 18-20% below consensus, reflecting cautious margin assumptions due to potential tariff-driven margin dilution
Valuation and Recommendation
Recommendation: BUY (maintained)
Target Price: RM2.30 (up from RM2.19), reflecting a 34.0x 2026F PE — in line with the industry’s seven-year forward PE benchmark
Environmental, Social, and Governance (ESG) Initiatives
Environmental:
Operations are not energy-intensive
New headquarters feature energy-saving initiatives (LED lighting, sensors)
Social:
Donated RM1.7m and RM2.9m to over 25 charities, non-profits, and educational institutions across 2020-21
Governance:
Anti-Bribery and Anti-Corruption Policy in place
Zero whistle-blower or bribery incidents reported in 2020
Key Financials: Profit & Loss, Balance Sheet, and Cash Flow
| Metric |
2024 |
2025F |
2026F |
2027F |
| Net Turnover (RMm) |
752 |
820 |
925 |
960 |
| EBITDA (RMm) |
203 |
194 |
231 |
258 |
| Net Profit (Adj., RMm) |
153 |
144 |
170 |
190 |
| EPS (sen) |
6.1 |
5.7 |
6.8 |
7.6 |
| ROE (%) |
20.5 |
17.6 |
17.9 |
18.5 |
| Net Debt/(Cash) to Equity (%) |
-0.2 |
-0.3 |
-0.3 |
-0.3 |
| EBITDA Margin (%) |
29.7 |
28.4 |
29.9 |
32.2 |
Strategic Outlook: Building Growth into Late 2025 and Beyond
Greatech is poised for a strong finish to 2025 and a robust 2026, with sectoral tailwinds in solar, e-mobility, and semiconductors supporting the orderbook. Improved policy clarity, Malaysia’s neutral trade stance, and global trade diversification are expected to drive further order wins. The company remains well-capitalized, with healthy cash balances and low leverage, supporting continued investment and growth initiatives.
Conclusion: BUY Rating Reaffirmed with Upgraded Target Price
Greatech Technology Bhd stands out among automation peers for its sectoral exposure, strong orderbook, prudent financial management, and ESG initiatives. Despite short-term forex-related challenges, the company is set to benefit from rising demand in its key sectors and stands well-positioned for sustainable long-term growth. The maintained BUY rating and higher target price of RM2.30 reflect this positive outlook for investors seeking exposure to Malaysia’s automation and industrial technology sector.
