Greatech's quarterly profit shoots up 80% on stronger demand, better profit margin

-A +A

KUALA LUMPUR (Nov 27): Industrial automation solutions provider Greatech Technology Bhd, whose shares have shot up almost five-fold in the past one year, reported today that its third quarter net profit jumped 79.58% from a year ago, as it enjoyed strong demand for its solutions and products.

Revenue for the three months ended Sept 30, 2020 grew 59% year-on-year to RM75.82 million from RM47.67 million, which lifted its net profit to RM23.22 million from RM12.93 million, its quarterly results filing to Bursa Malaysia today showed.

Consequently, earnings per share improved to 3.71 sen from 2.06 sen previously.

The group said it saw higher revenue recognised for production line systems in its latest reporting quarter, with an increase in demand from existing customers, and a notable rise in provision of parts as well as demand for on-site services, installation and commissioning.

The stronger demand lifted its quarterly gross profit margin to 45.94% from 34.58% a year ago, with gross profit rising to RM34.84 million from RM16.49 million.

For the nine months ended Sept 30, the group reported a net profit of RM59.33 million, up 63.53% from RM36.28 million in the corresponding period last year, as a result of higher revenue, which rose 17.38% to RM184.78 million from RM157.42 million, and stronger gross profit. In addition, it saw an increase in other income, which came from dividend income from the placement of short term funds. 

This gives the group a cumulative EPS of 9.48 sen, up 6.76% from 8.88 sen previously.

With the "solid set of results", the group said it remains confident in driving its growth initiatives to increase market presence as it enters the fourth quarter of 2020, even as it took note of significant uncertainties in the macroenvironment, not least of which is the ongoing pandemic.

"The group will continue to focus on positioning our production capacity and delivering equipment and services to our customers, while maintaining an intense focus on cost control, which will ensure the business remains well positioned to deliver tangible results and earnings expansion in 2021 and beyond. 

"As of Nov 13, 2020, the group’s order book stood at RM266.90 million, which is expected to last until the second half of 2021," it added.

Greatech shares closed 41 sen or 4.77% higher at RM9.01 today, for a market capitalisation of RM5.64 billion. Listed on the ACE Market of Bursa Malaysia at an initial public offering price of 61 sen in June 2019, the stock price has jumped over 14 times since. The stock was trading at RM2.40 at end-2019.