PETALING JAYA: Greatech Technology Bhd
is expected to have a positive outlook in 2024, on the back of robust order book visibility until 2025.
According to Phillip Capital Research, the group will be able to maintain strong earnings momentum for the year, supported by its current order book standing at RM1.1bil.
“We expect order book value to continue hovering around the current level as the group is actively pursuing more orders from both its existing and potential new customers,” it said in a report.
Greatech remains confident in its outlook for 2024, as it targets a total of RM1.1bil order book replenishment, with the majority of orders coming from its solar and electric vehicle (EV) segments and the remaining from its life science and semiconductor segment.
Phillip Capital Research is also of the view that the automation solution provider’s segmental outlook for the year will continue to be favourable.
According to the research house, Greatech is currently in discussion with First Solar for a potential capacity expansion to meet the growing demand for Series 7 module capacity ramp-up in its solar segment.
Via the discussion, the capital expenditure is expected to range between US$1.7bil and US$2bil in 2024.
Greatech continues to have optimism for its e-mobility business despite the global slowdown.
Meanwhile, the group aims to secure two new customers and RM400mil orders for the EV segment and is also on pace to deliver the prototype line for its virtual reality product in April 2024, under its semiconductor segment.
As for its life science segment, Greatech’s newly established company in Dublin was noted to have turned a profit for the first time in 2023 and is predicted to break even for the entire year in 2024.
Although no specifics have been released, Phillip Capital Research stated that the group’s growth plan into Costa Rica is believed to be progressing as intended, as it increases its manufacturing presence worldwide.
Locally, Greatech’s new Batu Kawan 4 plant is also on track for completion by April 2024, which will cater to its potential new and existing EV and life science clients.
Phillip Capital Research has tweaked its 2026 earnings forecast by 1% on the back of minor housekeeping adjustments.
“We believe the slowdown of the global automotive and solar industries has had a minimal impact on Greatech, given that its customers’ products are innovative in nature and are next generation, which has yet to be unveiled to the market,” it said in a report.
The research house also maintained its “buy” rating on Greatech with a target price of RM5.52 per share, based on an unchanged forecast of 35 times price-to-earnings multiple on 2025 earnings per share.
The key downside risks includes prolonged market recovery and potential unforeseen customer order delays.
