GENETEC 0104 GENETEC TECHNOLOGY BERHAD upbeat about renewables
Founder and managing director Chin Kem Weng said the company's electric vehicle (EV) and energy storage (ES) segments continue to be the main revenue contributors at 97.9 per cent, followed by the hard disc drive (HDD) segment at two per cent, and electro
KUALA LUMPUR: Genetec Technology Bhd (GTB) expects to record strong earnings in the coming quarters with the recent partnership with Citaglobal Bhd, replenish its strong book orders from existing customers, and bid for new projects.
Founder and managing director Chin Kem Weng said the company's electric vehicle (EV) and energy storage (ES) segments continue to be the main revenue contributors at 97.9 per cent, followed by the hard disc drive (HDD) segment at two per cent, and electronics at 0.1 per cent.
"We are excited about the opportunities in this space as we have been working to diversify our portfolio in the EV and ES segments.
"We will capitalise on our experience and expertise accumulated over the years to continue growing and diversifying our portfolio and finding new ways to bring value to the market and the clients we serve," Chin told The New Straits Times.
In October this year, GTB inked an exclusive collaboration agreement with Citaglobal to venture into the renewable energy (RE) industry through battery development.
GTB's role in the collaboration is to design, manufacture, and build the battery energy storage management systems (BESS) for Citaglobal.
Chin said the collaboration would see the BESS system supplied to designated project sites in different states across Malaysia over a multi-year period.
He said the initial research and development (R&D) design for the BESS yielded positive results, and GTB is now developing to scale up the pilot system.
"We are looking end of December for the BESS scale-up pilot system to be ready.
"The deployment and testing are expected to be completed within six months in mid-2023.
"For GTB, we consider the ES as significant to our business.
"As we continue to expand our business, we will partner and work with industry players looking into the renewable energy technology space, which will play a part in developing Malaysia's renewable energy infrastructure," he said.
According to the Economist Intelligence – Industry Outlook 2023 report, the sales of EVs will be the only bright spot amidst the stalling growth of the overall global technology and automotive industries, with a 25 per cent year-on-year (YoY) growth.
Further, the Global EV Outlook 2022 report also noted that the momentum in the EV and ES continues to grow, driven by consumer demand and supportive policies, especially on the back of the transition towards renewables in the race to combat global climate change.
The report noted that 2022 has seen EV sales continue on the same momentum as 2021, with the total number of EVs seeing a steady growth of 2 million sales in the first quarter of this year.
Meanwhile, the IDC Worldwide Solid State Storage Forecast 2022–2026 report stated that global HDD industry petabyte shipments are expected to see a compound annual growth rate (CAGR) of 18.5 per cent over the 2020–2025 forecast period.
The IDC report said that the average capacity per drive is forecast to increase at a five-year CAGR of 25.5 per cent.
When asked how the company is coping with the ringgit/US Dollar volatility, Chin said the depreciation of the local currency has allowed GTB to be more competitive as the company is in a business that focuses on export, with clients from the United States and Europe.
"We also continue to remain prudent in our cost management over the years.
"Our ability to manage our costs to cope with the volatility is a combination of astute planning, especially with the long-lead time, standard components, and our long-standing relationships with our suppliers or vendors," said Chin.
Commenting on the slowdown in China affecting demand for EV and ES space, Chin said both industries have a long way to go and are still in the early stages of development.
"To contextualise, the adoption today constitutes nearly 10 per cent of the total number of vehicle sales and is expected to grow by an estimated 25 per cent year on year.
"For GTB, there has been no change to our orders as the client's expansion plans remain on track.
"These are capital investments (capex) where they invest in the highly customised advanced manufacturing automation production system capabilities and capacity to scale production to meet future global demand," Chin said.
He said the growth and development of these industries have a very long runway, from business, and telecommunications, to the Internet of Things (IoT), entertainment, transport, e-sports, content, and much more.
"The industries we cater to will serve as building blocks for our digital future," Chin said.
For the second quarter (Q2) that ended September 30, 2022, GTB's net profit increased 53.6 per cent to RM25.06 million from the RM16.31 million recorded in the same quarter a year ago.
The company said all segments in its portfolio continue to grow, with segment contributions remaining consistent with the preceding quarter.
Revenue in Q2 increased 19.1 per cent to RM70.66 million from RM59.31 million.
https://www.nst.com.my/business/2022/12/860160/genetec-upbeat-about-renewables
