Broker: Maybank Investment Bank Berhad
Date of Report: September 1, 2025
ATECH’s Stellar 1H25 Performance: Why Aurelius Technologies Remains a Top Malaysian Tech Stock Pick
Executive Summary: Robust Growth and Strong Fundamentals
Aurelius Technologies (ATECH MK) has delivered a solid 1H25 performance, meeting expectations and reaffirming its status as a growth leader in Malaysia’s technology sector. Maybank Investment Bank Berhad maintains a BUY rating with a price target (TP) of MYR1.19, pegged to 21x FY25E EPS, reflecting confidence in ATECH’s upward trajectory and resilience amid sectoral challenges.
1H25 Results: Growth Momentum Continues
ATECH’s core earnings for 1H25 reached MYR34 million, up 14% year-on-year (YoY) and representing 47% of full-year estimates. Revenue surged 12% YoY to MYR311 million, driven by standout performances in the Communications & IoT (+19% YoY) and Semiconductor Components (+32% YoY) segments, partially offset by a decline in Electronic Devices (-28% YoY). The company’s core profit margin improved slightly to 11%, aided by a more favorable tax rate of 21.9%.
| Metric |
2Q25 |
1Q25 |
2Q24 |
YoY Change |
QoQ Change |
| Revenue (MYR m) |
162.9 |
147.9 |
152.3 |
+7.0% |
+10.2% |
| Gross Profit (MYR m) |
26.0 |
22.5 |
23.4 |
+11.1% |
+15.5% |
| EBIT (MYR m) |
20.9 |
21.5 |
20.6 |
+1.5% |
-2.7% |
| Net Profit (MYR m) |
16.4 |
16.1 |
16.0 |
+2.1% |
+1.6% |
| Recurring Net Profit (MYR m) |
17.2 |
17.2 |
16.5 |
+4.1% |
-0.1% |
| Gross Profit Margin (%) |
16.0 |
15.2 |
15.4 |
+0.6 ppt |
+0.7 ppt |
Segment and Geographical Performance: Key Drivers and Challenges
Segmental Revenue Breakdown – Communications & IoT Products: 84% of 1H25 revenue, up 19.2% YoY. – Electronics Devices: 11% of 1H25 revenue, down 27.5% YoY. – Semiconductor Components: 5% of 1H25 revenue, up 32.3% YoY.
Geographical Revenue Breakdown
Malaysia: 22% of 1H25 revenue, up 11.8% YoY.
Americas: 61% of 1H25 revenue, down 10.4% YoY.
APAC (excluding Malaysia): 11% of 1H25 revenue, up 35.9% YoY.
Europe: 5% of 1H25 revenue, down 14.4% YoY.
| Segment |
2Q25 Revenue (MYR m) |
1Q25 Revenue (MYR m) |
2Q24 Revenue (MYR m) |
1H25 Revenue (MYR m) |
1H24 Revenue (MYR m) |
YoY Change (%) |
| Comm. & IoT Products |
135.5 |
124.6 |
123.0 |
260.1 |
218.3 |
+19.2 |
| Electronics Devices |
19.1 |
15.2 |
22.4 |
34.3 |
47.3 |
-27.5 |
| Semiconductor Components |
8.3 |
8.1 |
6.9 |
16.4 |
12.4 |
+32.3 |
Quarterly Trends: 2Q25 Sees Mixed Performance
– 2Q25 revenue increased 10% quarter-on-quarter (QoQ) to MYR163 million. – Segmental growth: Comm. & IoT (+9% QoQ), Electronics Devices (+25% QoQ), Semiconductor Components (+3% QoQ). – Core earnings held steady at MYR17 million, as increased operating costs offset margin improvements. – Gross profit margin improved to 16% (up 0.7 ppt QoQ). – Orderbook declined to MYR436 million from MYR495 million in 1Q25.
Balance Sheet and Cash Flow: Solid Financial Position
ATECH maintains a robust balance sheet with net cash status and strong liquidity ratios. The company continues to invest in growth, reflected in significant capex spending and healthy free cash flow projections.
| Metric |
FY23A |
FY24A |
FY25E |
FY26E |
FY27E |
| Revenue (MYR m) |
386 |
604 |
666 |
707 |
767 |
| EBITDA (MYR m) |
53 |
75 |
107 |
117 |
130 |
| Core Net Profit (MYR m) |
38 |
57 |
74 |
79 |
89 |
| Core EPS (sen) |
9.7 |
14.2 |
5.7 |
6.1 |
6.8 |
| Net Dividend Yield (%) |
5.6 |
7.5 |
3.3 |
3.6 |
4.0 |
| ROAE (%) |
13.7 |
14.9 |
14.9 |
15.2 |
16.0 |
| Net Gearing (%) |
net cash |
net cash |
net cash |
net cash |
net cash |
Key Ratios: Efficiency and Profitability
ATECH’s ratios underline its robust operational efficiency and profitability. Highlights include:
- EBITDA margin: 16.0% (FY25E) rising to 17.0% (FY27E)
- EBIT margin: 13.8% (FY25E) rising to 14.5% (FY27E)
- Pretax profit margin: 13.9% (FY25E) rising to 14.5% (FY27E)
- Dividend payout ratio: Stable at 60% from FY25E onwards
- Current ratio: Improving to 4.0 by FY27E
- Cash conversion cycle: Stabilizing around 117 days in FY27E
Valuation and Price Performance: Attractive Upside Potential
– Current share price: MYR 1.02 – 12-month price target: MYR 1.19 (+20% upside) – Market capitalization: MYR1.3B (USD314M) – Free float: 46.9% – Major shareholders: Main Stream Holdings Sdn Bhd (16.1%), Main Stream Ltd (17.6%), EPF (7.8%) – Core P/E: 18.0x for FY25E, declining to 14.9x by FY27E – Historical recommendations consistently “Buy” across multiple periods, with price targets ranging from RM0.7 to RM1.4
Risk Factors: What Investors Should Watch
Maybank flags several risks:
- Weaker-than-expected customer demand amid inflation and geopolitical uncertainty
- Lower cost pass-through, dependent on client negotiations
- Operational disruptions from labor issues or component shortages
- Unfavorable forex fluctuations impacting margins
Peer Comparison: EMS Sector Forward PE
ATECH is valued near +1SD of the sector’s five-year forward PE, with a sector mean at 17.2x and +1SD at 20.3x, highlighting its premium growth prospects.
Outlook: Anticipating a Stronger Second Half
Historically, ATECH’s second-half performance outpaces the first half due to seasonal demand trends. The company is well-positioned as a beneficiary of global trade diversion, with exposure to niche international customers and a solid growth outlook.
Conclusion: Why ATECH Deserves Investor Attention
Aurelius Technologies stands out in Malaysia’s tech sector for its consistent growth, strong margins, healthy cash position, and strategic market positioning. With a 20% upside potential and robust fundamentals, ATECH remains a compelling buy for investors seeking growth and stability in technology manufacturing.
Contact Information
For further details or investment queries, reach out to Maybank Investment Bank Berhad or check their regional offices in Singapore, London, Hong Kong, Indonesia, India, Philippines, Thailand, and Vietnam.
Appendix: Definition of Ratings
- BUY: Expected return above 10% in the next 12 months (including dividends)
- HOLD: Return expected between 0% to 10% in the next 12 months
- SELL: Return expected below 0% in the next 12 months
Investment ratings apply only to active coverage universe stocks.
