Genetec likely to return to profitability in FY27

By the Editorial Team · Thursday, September 3, 2026

Genetec Technology Bhd reported a narrower net loss of RM14.2 million in 4Q26 with an 8.8% revenue increase but remains unprofitable for FY26 due to weak order fulfillment and high costs. CIMB Research expects the company could return to profitability by FY27 if it secures new contracts, particularly from North American and e-mobility sectors, though near-term risks and limited visibility remain.

Genetec Technology Bhd may return to profitability in the financial year ending March 31, 2027 (FY27), according to CIMB Research, although the pace of recovery will depend on securing new orders and converting prospective opportunities into confirmed contracts.

The research firm expressed cautious optimism about Genetec’s prospects for FY27, driven by potential new business from its existing customers in North America and the e-mobility sector. However, the company remained unprofitable in the fourth quarter of FY26 (4Q26), reporting a core net loss of RM14.2 million, slightly improved from RM14.5 million in the previous quarter. The narrowing loss was attributed mainly to reduced finance costs and tax expenses. Meanwhile, revenue grew 8.8% quarter-on-quarter to RM22.3 million, marking the first sequential increase in 18 months since 4Q24.

For the full FY26 period, Genetec recorded a core net loss of RM134 million, a significant reversal from the RM7.3 million core net profit achieved in FY25. The downturn was driven by weaker order fulfillment and higher operating costs. Cost pressures remained elevated due to increased installation and freight expenses, which the company faced after relying heavily on U.S.-based subcontractors and air freight to meet delivery deadlines for a North American customer.

CIMB Research highlighted that Genetec’s ongoing efforts to diversify its customer base and expand across sectors are constructive, but noted that short-term visibility is limited as new business engagements have yet to materialize into firm orders. The company is actively pursuing opportunities in related automation segments and energy markets, while maintaining focus on project returns, execution risks, and resource allocation.

A successful transition of these potential contracts could help broaden Genetec’s revenue streams, reduce dependency on a concentrated customer base, and enhance earnings stability in the longer term. Despite this, the research firm maintained a “reduce” rating on Genetec shares but raised its target price to 21 sen from 14 sen, based on 0.5 times price-to-book value, which remains one standard deviation below the company’s five-year average.

CIMB Research also increased its earnings per share forecast for FY27 to FY28 by between 1% and 3%, reflecting adjustments made after reviewing the company’s completed FY26 results.

Potential downside risks cited include weaker-than-anticipated order replenishment, delays in awarding new contracts, and further appreciation of the Malaysian ringgit against the U.S. dollar. Conversely, upside risks could arise from stronger order inflows, improved profit margins as assembly programs stabilize, and continued success in diversifying into electric vehicles, consumer electronics, medical devices, and battery energy storage markets.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.