PENTA: Outlook Brightens on Robust Demand and New Product Pipeline, Analyst Sets Buy Rating
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading automation technology provider is poised for a strong performance through 2026, driven by sustained momentum in its key segments and the rollout of innovative new products. Management expresses significant optimism regarding future growth, projecting substantial revenue increases in the coming years.
Performance Review and Key Drivers
The company’s revenue in the third quarter of 2025 was primarily propelled by its medical segment, a trend anticipated to continue into 2026, as demand for automation solutions tied to customers’ new product launches gains traction. The consumer/industrial segment is also gaining considerable momentum, bolstered by an order book totaling RM90 million, with demand expected to accelerate further in 2026. Both the medical and consumer/industrial segments are expected to be primary contributors to the group’s earnings in 2026.
The Factory Automation Systems (FAS) segment currently accounts for approximately 60% of the total order book, with medical contributing 35% and consumer/industrial 20%. The Automotive (24%) and Semiconductor (15%) customers form the bulk of the remaining 40% from the Automated Test Equipment (ATE) segment.
Future Outlook and New Product Pipeline
Management maintains an upbeat outlook, particularly for 2026, with expectations for double-digit revenue growth and a target of RM1 billion in group revenue by 2027. A significant driver for this growth is the ATE segment, which is projected to make meaningful contributions from the second half of 2026, ramping up fully in 2027. This acceleration is supported by the planned launch of nine new advanced packaging solution products between 2026 and 2028. These new solutions are anticipated to command average selling prices (ASPs) 2.5 times higher than existing legacy products.
The introduction of these advanced solutions is also expected to significantly improve the group’s gross profit margin, especially once anchored customers in the OSAT, optical, hyperscaler, and IDM segments across Taiwan and the US are secured. With the ramp-up of new products and stronger contributions from the FAS segment, the company is strategically positioned for substantial future growth.
Investment Recommendation
Analyst firm TA SECURITIES has issued a “BUY” recommendation on the company’s shares, setting a target price of RM0.25. This target implies a significant upside of 25.0% from the last traded price of RM0.20, reflecting confidence in the company’s robust growth prospects and strategic initiatives.
