Pentamaster misses expectations, outlook downgraded
KUALA LUMPUR: Pentamaster Corp Bhd's first quarter net profit of RM9.9 million, which dropped 37 per cent due to weaker revenue from the medical segment, has missed expectations.
CGS International Securities Malaysia Sdn Bhd said the results made up only 12 per cent of its full-year estimates and 15 per cent of Bloomberg consensus.
The firm expects medical segment revenue to decline by 20 per cent in financial year 2025 (FY25) as more US-based MedTech companies may increasingly seek to re-shore their manufacturing operations.
"This trend could be particularly pronounced for companies with existing facilities in the US, potentially limiting strong order wins for Pentamaster compared to our earlier expectations," it said in a note.
The firm lowered its earnings forecasts for Pentamaster by 14 per cent-17 per cent for FY25-FY27 to reflect more conservative revenue growth assumptions for its equipment segment amid rising uncertainties in the automotive sector.
The firm said that these uncertainties, driven by reciprocal US tariffs, could dampen demand for the group's known good die and burn-in testers.
However, Pentamaster's diversification into new growth areas, such as renewable energy and high-performance computing, may alleviate the emerging challenges pertaining to the US tariff situation, added CGS International.
"We expect these new segments to contribute five per cent of FY25F revenue, driven by the group's ongoing efforts to expand its sales pipeline," it said.
The firm downgraded its call for Pentamaster to 'Hold' from 'Add' with a lower target price of RM2.70 following the earnings revision.
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