KUALA LUMPUR (June 29): Factory automation solutions provider Greatech Technology Bhd, which has been one of the best-performing tech stocks on Bursa Malaysia this year, has no plans to pay out any dividends in the next two to three years.
Greatech chief executive officer Tan Eng Kee, who controls 71% of the company, said he prefers to delay any dividend payout so as to enable Greatech to grab hold of emerging growth opportunities.
“I would be the happiest person of all if the company were to pay dividend, [however] I want to better make use of the company’s cash to grow the business," he said during the group's annual general meeting that was held virtually today.
At the same time, Tan said the company has established cash-flow performance metrics with a 'cash-flow circuit breaker' that caps the company's annual spending, to ensure strong scrutiny on Greatech's expansion plans.
In terms of new product launches, Tan said the company will be focusing on developing a high-accuracy processing tool, which it targets to launch in 2021.
The company also intends to launch one or two more products for industries that are previously not covered by the company. These include electric vehicle (EV) batteries and a medical/life sciences equipment — both of which the company has recently obtained orders for — as well as test equipment sensors for the semiconductor industry.
Moving forward, it intends to extend its international reach by setting up international offices, with three offices in the US by the third quarter of this year. One will be in Detroit to cater to its EV battery portfolio, one in Chicago for the business that caters to the medical industry, and one in Arizona that caters to its consumer electronics products.
It also plans to have an office in Germany by the third quarter of 2021 to look out for more business opportunities under its automation solutions business.
As for its new headquarters cum assembly plant that is under construction in Batu Kawan, it is expected to be completed in February 2021. On completion, it will have a built-up space of 130,000 sq ft.
At noon break, Greatech’s shares were trading 4 sen or 1.04% higher at RM3.87, giving it a total market capitalisation of RM2.39 billion. The stock has jumped RM1.47 from when it was trading at RM2.40 at end-2019.
Valuation-wise, Greatech is currently trading at a price-earnings multiple of 33.8 times valuation, up 59% from 21.2 times at the start of the year. This means there are strong expectations among investors for Greatech to show earnings growth.
Since its listing in June last year, Greatech’s market cap has jumped by more than five times to RM2.39 billion from its IPO market value of RM381.86 million.