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Feytech’s Q2 2025 Results: Navigating a Tough Automotive Market
Feytech Holdings Berhad, a prominent manufacturer of automotive covers and seats in Malaysia, has just released its financial results for the second quarter ended June 30, 2025. The report reveals a challenging period marked by a significant year-on-year downturn, yet it also contains signs of a sequential recovery. Let’s dive deep into the numbers to understand what’s driving the performance and what the road ahead looks like for the company.
Core Financial Highlights
A Challenging Quarter: Year-on-Year Performance
Feytech Holdings Berhad reported a notable decline in its second-quarter performance compared to the same period last year. This was primarily driven by weaker order volumes from key automotive clients, impacting both of its main business segments.
Q2 FY2025
Revenue
RM 31.86 million
Profit Before Tax (PBT)
RM 4.02 million
Profit After Tax (PAT)
RM 3.02 million
Earnings Per Share (EPS)
0.35 sen
Q2 FY2024
Revenue
RM 68.20 million
Profit Before Tax (PBT)
RM 22.23 million
Profit After Tax (PAT)
RM 16.52 million
Earnings Per Share (EPS)
3.94 sen
The 53.3% drop in revenue year-on-year is significant. According to the report, this was a direct result of lower sales orders from three automotive brands, which affected both the automotive seat and cover manufacturing divisions. This reduction in sales volume also impacted economies of scale, leading to a sharp decrease in gross profit and overall profitability.
Signs of Recovery: Quarter-on-Quarter Improvement
Despite the tough year-on-year comparison, Feytech showed resilience with a marked improvement from the immediate preceding quarter (Q1 2025). This sequential growth suggests a potential turnaround and stabilisation in demand.
| Metric | Q2 2025 (Current Quarter) | Q1 2025 (Preceding Quarter) | Change |
|---|---|---|---|
| Revenue | RM 31.86 million | RM 29.49 million | +8.0% |
| Profit Before Tax (PBT) | RM 4.02 million | RM 2.65 million | +51.9% |
| Profit After Tax (PAT) | RM 3.02 million | RM 2.07 million | +45.7% |
The company attributes this positive quarter-on-quarter performance to higher sales of automotive covers, driven by an uptick in demand from two specific automotive brands. The strong growth in profitability highlights improved operational leverage as revenue began to recover.
Financial Health Check: A Strong Foundation
A look at the balance sheet reveals a company on solid financial footing. As of June 30, 2025, Feytech holds a substantial cash and short-term deposits position of RM 159.36 million. The Group’s total equity stands at RM 249.35 million against total liabilities of RM 67.80 million, indicating a low gearing ratio. Furthermore, the company generated a healthy RM 26.01 million in net cash from operating activities year-to-date, proving that its core business remains cash-generative even during a downturn.
Risks and Prospects: The Road Ahead
Navigating Industry Headwinds
Feytech’s performance is intrinsically linked to the health of the Malaysian automotive sector. The Malaysian Automotive Association (MAA) has forecasted a Total Industry Volume (TIV) of 780,000 units for 2025, a 4.5% decline from the record high in 2024. This anticipated market slowdown, combined with increased competition from new foreign brands and ongoing supply chain pressures, presents a challenging operating environment for the second half of the year.
Strategic Initiatives for Growth
In response to these challenges, Feytech is not standing still. The management has outlined a clear strategy focused on cost optimisation, enhancing operational efficiency, and actively pursuing new business. Key initiatives include:
- New Projects: The Group is actively pursuing new Completely Knocked Down (CKD) projects with both existing and potential new Original Equipment Manufacturer (OEM) customers.
- Capacity Expansion: Its subsidiary, FTRT Autoparts Sdn Bhd, has secured a new manufacturing plant in Subang, Selangor. This facility is set to commence operations in the fourth quarter of 2025 with an estimated annual capacity of 36,000 sets of automotive seats, positioning the company for future demand.
- Diversification: Feytech is exploring opportunities in related product segments within the automotive parts industry to broaden its revenue streams and reduce dependency on a narrow range of products.
Summary and Outlook
In summary, Feytech’s Q2 2025 results reflect a company navigating a tough, cyclical downturn in the automotive industry. The year-on-year figures are stark, but the quarter-on-quarter recovery provides a glimmer of optimism. The company’s robust balance sheet and strong operating cash flow are significant strengths, providing the stability needed to weather the current market softness and invest in future growth.
Looking ahead, while the short-term market outlook remains challenging, Feytech’s proactive strategies—including plant expansion, the pursuit of new OEM contracts, and potential diversification—are crucial steps to mitigate risks and position the company to capitalize on the next upcycle in the automotive sector.
- Malaysian TIV Performance: The overall health of the national automotive market in the second half of 2025 will be a key determinant of performance.
- New Plant Execution: The successful and timely commencement of operations at the new Subang plant in Q4 2025 is a critical milestone to watch.
- New Project Wins: Announcements of new contracts with OEM customers would provide a significant boost to future earnings visibility.
- Competitive Landscape: The impact of increased competition from new market entrants on Feytech’s market share and margins.
Final Thoughts
From my perspective, Feytech’s Q2 2025 report paints a picture of a resilient company facing predictable industry headwinds. The year-on-year drop is concerning but not unexpected given the broader market normalisation after a record year. The key positive is the sequential improvement and the company’s strong balance sheet, which provides a crucial buffer and allows for strategic investments. Their forward-looking strategies, particularly the new plant and diversification efforts, are vital for long-term sustainability.
What are your thoughts on the Malaysian automotive sector for the rest of 2025? Do you think Feytech’s expansion plans are timed correctly to capture the next wave of growth?
Share your insights in the comments below! We’d love to hear your perspective.
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