Pentamaster Corp (PENT MK) showcased solid performance in its factory automation solutions segment, according to a report by RHB Investment Bank (RHB).The company's 1H24 core net profit of RM40.3 million, reflecting a 20.3% year-on-year increase, met expectations, supported by strong growth in its medical devices sector. Despite a slow recovery in the automotive industry and challenges in the semiconductor market, Pentamaster's focus on factory automation and medical devices continued to drive revenue, reaching RM342.2 million in 1H24.
RHB maintains a BUY recommendation on Pentamaster, setting a target price of RM6.16, which represents a 26% upside potential. The bank highlights the company's resilience through its diversified portfolio and growth in automation solutions, which are expected to bolster performance in the second half of the year.
The outlook for Pentamaster remains positive as it leverages its intelligent Automated Robotic Manufacturing System (i-ARMS) technology and expands into the renewable energy sector, particularly solar manufacturing. The company's order book stands at RM400 million, supported by ongoing developments in the medical device industry and automation integration.
RHB's projections anticipate a stronger second half of 2024, with continued growth in the factory automation solutions segment. The target price reflects a favourable valuation based on an unchanged 33x FY25F Price-to-Earnings (P/E) ratio and a 2% premium considering the company's solid Environmental, Social, and Governance (ESG) score of 3.1.