GREATEC: Results Exceed Forecasts Amid Strategic Diversification, Target Price Raised

Despite a challenging operating environment, the company has reported financial results for the full fiscal year 2025 (FY25) that surpassed both internal and street expectations. While core profit saw a year-on-year decline, the performance exceeded forecasts, indicating resilience and effective management amidst various headwinds.

Performance Review

The company’s core profit for FY25 stood at RM124.9 million, representing a 22% decrease compared to the previous year. However, this figure accounted for 111% and 106% of the research firm’s and consensus full-year expectations, respectively, highlighting a stronger-than-anticipated outcome.

The fourth quarter of FY25 (4QFY25) saw revenue slip 17.1% year-on-year, from RM205.8 million to RM170.7 million. This decline was primarily attributed to weaker sales contributions from the Life Sciences and Solar segments, as customers delayed their capital expenditure. Consequently, 4QFY25 core profit retreated by 39% year-on-year, dropping from RM36.7 million to RM22.4 million. The normalised gross margin also contracted from 30.5% to 28% during the quarter, largely due to RM10 million in tariff-related costs and the appreciation of the Malaysian Ringgit against the USD.

Future Outlook and Strategic Direction

The company maintains a robust order book, which stood at RM1 billion as of February 2026, a significant increase from RM697 million in November 2025. This growth was bolstered by recently secured data centre jobs totaling RM400-500 million. The current order book composition is diverse, with data centres contributing 50-55%, energy 15-20%, E-mobility 10-15%, semiconductor 10-15%, and life science 5-10%.

In a strategic move to accommodate new project wins, the company has earmarked RM322 million for the development of a new facility in Batu Kawan, Penang. This investment aligns with the company’s diversification strategy into new high-growth segments such as autonomous vehicles, humanoid robotics, and data centres. Management is particularly optimistic about the data centre segment, targeting annual job wins of approximately RM1 billion over the next 2-3 years. The company recently secured an RM70 million job related to autonomous vehicles, contributing to its year-to-date total job wins of RM460 million out of an ambitious RM2 billion target for the current year.

Looking ahead, management anticipates margin improvement as tariff costs are expected to be passed on to customers. Furthermore, the Slovakia operation, which has faced challenges, is projected to turn around, contributing positively to future performance.

Given the strong order book, strategic diversification, and positive outlook, TA SECURITIES has issued a BUY recommendation with a revised target price of RM0.25, representing an upside of 25.0% from the last traded price of RM0.20.