Greatech Technology Berhad (GREATEC) has shown consistent financial growth, but its gross profit margin, profit before tax margin, and net profit margin have been declining since FY2022. Let’s dive into the latest quarterly results and the cumulative 12-month financial performance for FY2024 to understand what’s happening.
Q4FY2024 Earnings Results
YoY Q4 Comparison (FY2024 vs FY2023)
The Group’s Q4FY2024 revenue rose 33.11% YoY to RM205.84 million, driven by strong demand in the Life Sciences sector and strategic acquisitions, including new customers from Greatech Integration (Ireland) Limited.
Gross profit increased to RM65.87 million, though the GP margin declined to 32% from 37.72% in Q4FY2023. The normalised GP margin fell to 30.56% due to a lower proportion of high-margin installation-related revenue.
Profit before tax (PBT) surged 42.52% to RM63.64 million, with the PBT margin improving to 30.92%. The normalised PBT margin rose to 29.47%, mainly due to a RM17.92 million net forex gain from the stronger US Dollar against the Ringgit.
YoY Cumulative 4Q Comparison (12MFY2024 vs 12MFY2023)
The Group reported revenue of RM752.37 million for 12M2024, up 14.21% from RM658.75 million in 12M2023, driven by strong growth in the Life Sciences sector and strategic acquisitions, including new customers from Greatech Integration (Ireland) Limited.
Gross profit rose to RM236.03 million, with a GP margin of 31.37%, supported by lower subcontractor costs, though partially offset by higher manpower expenses. The normalised GP margin improved to 31.19% from 29.43% in 12M2023.
Profit before tax (PBT) increased by 8.12% to RM179.56 million, though the PBT margin declined to 23.87% from 25.21%, mainly due to a net foreign exchange loss of RM1.49 million in 12M2024, compared to a gain of RM10.95 million in 12M2023.
QoQ Comparison (Q4FY2024 vs Q3FY2024)
The Group’s revenue for Q4FY2024 rose by RM17.04 million or 9.03% from Q3FY2024, driven by growth in the Life Sciences, E-Mobility, and Semiconductor sectors, though partially offset by lower Solar sector revenue due to project timing.
Gross profit increased slightly by RM0.09 million, but the GP margin declined from 34.84% to 32.00%. The normalised GP margin (excluding net warranty impact) fell to 30.56% from 34.96%, mainly due to lower installation-related revenue, which typically carries higher margins.
Profit before tax (PBT) surged by RM34.68 million to RM63.64 million, with the PBT margin improving from 15.34% to 30.92%. The increase was largely driven by a net foreign exchange gain of RM14.74 million in 4Q2024, compared to a loss of RM24.70 million in 3Q2024, due to the stronger US Dollar against the Malaysian Ringgit. This was partly offset by higher staff costs.
Future Prospects
The Group is gearing up for more growth in 2025, riding on its solid 2024 performance. Despite ongoing geopolitical and economic uncertainties, the company is well-positioned in high-growth sectors like clean energy, EVs, and life sciences, which offer strong long-term potential.
With RM125 million set aside for capital expenditure—including a land purchase in Batu Kawan, Penang—the Group is doubling down on expansion. It’s also tightening project cost management, improving supply chain efficiency, and leveraging M&A synergies to boost profitability.
As of 12 Feb 2025, the Group’s order book stands at RM785 million, providing revenue visibility until mid-2026. While challenges remain, the Group is confident in navigating uncertainties and staying on track for long-term success.
However, semiconductor industry expected to remain soft amid tariff by US President Trump to the rest of the world. New tariff expected to come in soon towards different industry, therefore overall market turbulence is expected. New tariff expected to hit GREATEC as GREATEC main revenue contribution (70% of total group revenue) from US customers.
Stock Chart
GREATEC’s share price has been on a downtrend since July 2024, following a brief uptrend from May to July. As of 18/2/2025, the day its quarterly earnings were released, the stock touched its support level. However, on 19/2/2025, it closed below this key level. Moving forward, it will be crucial to monitor whether the price can rebound and reclaim the support line or if the downtrend continues further.
*Share price as at 19/2/2025 Closing*
Consensus Estimate
Based on the consensus estimate from ShareInvestor.com, the mean target price issued by research house stands at RM 2.561, which reflects almost 41% of potential upside from current price around RM 1.81 (As at 19/2/2025). Consensus estimate allows investors to access the analysts’ target price to assist on the individual stock fair price analysis and investment decision.
Conclusion
GREATEC has demonstrated solid revenue growth, driven by strong demand in key sectors and strategic acquisitions. However, margin pressures remain a concern, with declining GP and PBT margins over the past few years. The company is proactively addressing these challenges by optimizing costs, expanding capacity, and leveraging M&A synergies.
Looking ahead, GREATEC’s strong order book of RM785 million provides revenue visibility until mid-2026, while its expansion plans signal confidence in long-term growth. Investors should keep an eye on its margin recovery, foreign exchange impact, and execution of its growth strategies.
However, the semiconductor industry is expected to remain soft due to new tariffs imposed by U.S. President Trump, leading to market turbulence. As GREATEC derives more than 70% of its revenue from U.S. customers (based on FY2023 data), these tariffs could impact its financial performance.
On the technical front, GREATEC’s share price is testing a key support level, and its movement in the coming weeks will be crucial in determining the next trend. With a consensus target price of RM2.561, the stock presents a potential upside of 41% from current levels, but investors should weigh this against macroeconomic uncertainties and sector dynamics before making investment decisions.
Despite hitting record-high revenue and profit, GREATEC’s share price is trending downward instead of rising. There must be a reason why GREATEC’s share price down 2 days consecutively on the day and the following day quarterly earnings released. There was also a sharp downtrend starting mid of Jan 2025. This signals potential concerns that investors should pay attention to. It’s crucial to closely monitor the company’s future growth and key developments.