CIMB Securities has maintained its REDUCE call on Genetec Technology Bhd while raising its target price to RM0.21 from RM0.14, saying the company is showing early signs of recovery but order visibility remains limited.
Genetec’s revenue rose 8.8% quarter-on-quarter to RM22.3 million in 4QFY26, marking its first sequential improvement in 18 months. Its core net loss also narrowed slightly to RM14.2 million from RM14.5 million in the previous quarter.
For the full year, however, Genetec recorded a core net loss of RM134 million, reversing from a RM7.3 million profit a year earlier as weaker order fulfilment and higher operating costs continued to weigh on earnings.
CIMB Securities expects the company to return to profitability in FY27, supported by potential order replenishment from existing North American and e-mobility customers. The research house also sees progress in Genetec’s efforts to diversify into adjacent automation and energy segments.
However, it said new customer engagements have yet to translate into firm orders, leaving near-term visibility weak.
The research house raised its FY27-FY28 earnings per share forecasts by 1-3% and based its higher target price on 0.5 times price-to-book value, which is one standard deviation below Genetec’s five-year mean.
CIMB Securities said weaker-than-expected order replenishment, delays in contract awards and further appreciation of the ringgit against the US dollar could weigh on the stock, while stronger orders and margin improvements could provide upside.
As of 10.45 am, the stock price slipped 1.54% to RM0.32.
