Genentech Technology Berhad recently held a Q4 FY24 briefing, led by Mr. KH. Tan, CFO, and Mr. KW. Chin, Co-Founder and MD. The briefing focused on the company’s financial performance, key revenue drivers, and future business outlook.

Financial Performance

Revenue and Profit Margins

For Q4 FY24, GENETEC achieved a revenue of RM70.5 million, marking a 7.5% increase from the same quarter the previous year. The main contributors to this revenue were the EV and energy storage segments, generating RM68.2 million for the quarter and RM291.8 million for the full year. The electronic segment accounted for the remaining revenue.

The gross profit for Q4 FY24 was RM19.1 million, an increase from RM13.6 million in Q4 FY23. This resulted in a gross profit (GP) margin of 33%, up from 29% in the previous year. The profit before tax margin also saw a significant rise, from 20.7% to 27.1%, attributed to higher gross profits and reduced expenses from previous quarters' professional fees

Year-on-Year Performance

GENETEC’s year-to-date revenue for FY24 remained consistent with the previous year, with improvements in financial indicators driven by economies of scale and efficiency from recurring projects. The profit after tax (PAT) margin and profit after tax and minority interests (PATMI) margin improved to 25.1% and 23.8%, respectively, from 16.9% and 15.7% the previous year.

Financial Adjustments

Mr. Tan noted that as of March 31, 2024, GENETEC had collected approximately 50% of its receivables, amounting to RM39 million. The company changed its financial year-end from March 31 to June 30, extending the current financial year to a 15-month period ending June 30, 2024. The next analyst briefing will cover Q5 FY24.
 

Business Segments and Revenue Drivers

EV and Energy Storage Segments

The EV and energy storage segments continue to be the primary revenue drivers for GENETEC, comprising 99% of the company’s order book. The energy storage segment alone accounts for RM204 million of the orders, with projects including Gen 4 anode cathode conveying systems and large-scale switches for North America. The e-mobility segment, which includes regenerating systems and ECUs, contributes RM49 million

Business Outlook

Expansion and Innovation

Mr. Chin emphasized the company’s ongoing efforts to expand its business scope and client base globally. Despite a soft macroeconomic environment, GENETEC has maintained a strong position, particularly in the automotive industry, serving both EV and plug-in hybrid electric vehicle (PHEV) markets.

Future Projects and Technologies

GENETEC is actively involved in new technology projects such as steer-by-wire systems for full self-driving (FSD) vehicles and the Cybertruck. The company is also preparing for the mass production of new models and technological upgrades, reflecting its strong relationship with major clients and its capacity to retool and enhance existing platforms.
 

Market Dynamics

Despite some automotive manufacturers shifting focus from EVs to PHEVs, GENETEC’s largest North American client is accelerating the production of Cybertrucks and semi-trucks. This, along with potential interest rate cuts in the US, could stimulate the EV market and improve consumer affordability.
 

Battery Cell Demand

The demand for battery cells remains high, particularly for larger vehicles like semi-trucks, which require significantly more battery capacity compared to sedans and SUVs. GENETEC is exploring opportunities to expand into the battery preparation line for 2170 cells to meet this growing demand.
 

Conclusion

GENETEC’s Q4 FY24 results showcase the company’s robust financial health and strategic positioning in key markets. The focus on expanding business opportunities, leveraging technological advancements, and maintaining strong client relationships is expected to drive sustained growth in the upcoming quarters.