RHB Investment Bank Bhd's (RHB Research) has maintained a BUY call for Pentamaster Corp Bhd with a target price of RM5.95 despite the company's first nine months of 2024 (9M24) core net profit of RM63.6 million falling short of market expectations.

The research house attributed the underperformance to a weaker-than-expected recovery in the automotive sector, plagued by the impact of new policies and tariffs imposed by the US and Europe on Chinese-made electric vehicles (EVs).

The company's revenue for the third quarter of 2024 also showed a decline of 12.4% quarter-on-quarter and 15.1% year-on-year, totalling RM150.2 million.

Despite the setbacks in its automotive division, Pentamaster remains optimistic about the future, particularly within its factory automation solutions (FAS) segment as the medical device industry's increased adoption of FAS for enhanced operational efficiency, safety and regulatory compliance presents significant growth opportunities. This shift is expected to offset the challenges in the automotive sector and contribute to long-term growth.

RHB Research said these areas are expected to drive future growth, alongside the company's focus on improving operational efficiencies.

The research house added that the company's ability to pivot towards other high-growth segments, such as semiconductor packaging and optoelectronics, provides optimism for its long-term performance.