KUALA LUMPUR: RHB Investment Bank Bhd (RHB Research) is maintaining its "Buy" call on Pentamaster Corp Bhd despite a disappointing nine-month financial results dragged by weak demand in the automotive sector, citing several key growth opportunities.
The firm said Pentamaster's factory automation solutions (FAS) segment presents growth opportunities, particularly in the medical device sector, as the industry progressively adopts FAS for operational efficiency, safety, and adherence to stringent regulatory standards.
Pentamaster Corp's nine-month core net profit for 2024 came in at RM63.6 million, marking a modest year-on-year (YoY) increase of 3.4 per cent and fell below market expectations, according to RHB Research.
It said Pentamaster's profits was "below expectations," with the company achieving only 67 per cent and 70 per cent of RHB's and the market's full-year profit projections as the automotive sector experienced a tough quarter, heavily influenced by U.S. and European tariffs on Chinese electric vehicles.
The company, impacted by sluggish demand in the automotive sector, reported a shortfall in its automated test equipment (ATE) segment due to weakened project values in both the automotive and electro-optical segments.
Despite underperformance, RHB Research has maintained its target price of RM5.95, implying a 49 per cent upside and a 0.5 per cent projected yield for FY24.
RHB Research sees Pentamaster's diversification efforts, especially in high-growth areas like semiconductor packaging, as supportive of long-term stability.