Pekat Group Berhad announced that it wholly owned subsidiary had completed the RM96 million acquisition of 60% stake in Apex Power Industry Sdn Bhd and its wholly owned unit EPE Switchgear Sdn Bhd marking the company's foray into power equipment manufacturing sector.

The acquired firms are among Malaysia's largest manufacturers of medium voltage electrical switchgears, and are also involved in manufacturing, engineering and project activities within the power sector. Its products are sold to foreign countries in various regions including Asia Pacific, Middle East and Europe such as Qatar, Sri Lanka, Oman, Australia and Germany.

Mr Tai Yee Chee , Chief Executive Officer of Pekat, said this strategic move positions Pekat in a well-established sector, offering steady growth and solid returns. By adding this robust new pillar, Pekat reinforces its path to sustainable and enduring profitability, with the power distribution segment projected to contribute 25% or more to the Group's future earnings.

"Pekat will leverage on Apex Power Group's track record in the Power Distribution Equipment Business segment and foreign markets presence to expand and complement the Group's existing businesses and market position.

"This is expected to be achieved via the integration of power distribution equipment marketed under the "EPE" brand into the Pekat's products and services, thereby allowing cross-selling of the Group's ELP products to EPE Switchgear's customer base, as well as the inclusion of EPE Switchgear's power distribution equipment for the Group's solar projects," he added.

Accordingly, this would facilitate Pekat to tender and/or secure new contracts or customers, as well as potentially venturing into new foreign markets by offering a more comprehensive range of products and services.

"The Power Distribution Equipment Business segment is expected to increase and diversify the Group's earnings based on the aggregated profit guarantee from Apex Power of not less than RM48 million for the combined periods in the financial year ending Sept 30, 2024 (FY2024) to FY2026. Therefore, we expects the new business segment to contribute 25% or more of the net profits of the Group in the future," Mr Tai further added.

Pekat Teknologi had on 1 August 2024 entered into a share sale agreement with Apex Power for the acquisition of 75,000 shares, representing 60% equity interest in Apex Power for RM96 million cash.

For the nine months ended 30 September 2024 ("9MFY2024"), Pekat's revenue increased 16.4% to RM196.84 million from RM169.17 million, driven by growth across solar PV, ELP and trading segments.

The Company's 9MFY2024 net profit rose significantly by 43.9% year-on-year, while net profit margins improved by 1.43 percentage point. This exceptional quarter propelled Pekat's 9MFY2024 PAT to RM14.74 million, exceeding FY2023's full-year bottom line of RM13.75 million.