CROSBY Research – Pentamaster International (1665 HK/ BUY): Auto segment weak while medical devices thrived

5 September 2024

Despite operating in challenging market conditions in 1H24, Pentamaster managed to maintain its 1H24 at MYR342.1m, which stood at the same level as 1H23. GPM eased down by 0.8ppt to 28.6% in 1H24, mainly due to 1) reduced economies of scale in the Automated Test Equipment (ATE) segment on the back of lower sales volume; 2) increased in staff costs; 3) provisions for slow-moving inventories and 4) increase in R&D expenses. Net profit consequently declined by 12.8% YoY to MYR62.7m in 1H24.