Aztech (SGX:8AZ)'s 3QFY25 net profit declined 21% y-o-y (-26% q-o-q) to S$10.8m, in line with reduced revenue of S$133.5m (–19.9% y-o-y, –6.9% q-o-q) amid subdued end-market demand from key customers.
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3QFY25/9-month results broadly in line; net margins weaker due to higher tax rate.
3QFY25 net margin, however, declined to 8.1%, vs 10.2% in 2QFY25 and 8.2% in 3QFY24, mainly due to higher effective tax rate in Malaysia and Singapore.
In terms of geographical revenue breakdown, North America accounts for 72.6% of the total revenue for 9-month FY25, vs 80.5% in the previous corresponding period, implying a reduction in contribution from its key customer in the US.
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Diversification momentum builds as order rebound looms.
The group continues to execute on its diversification strategy while expanding its project pipeline to capture emerging opportunities. Year to date, it has secured 22 new project wins and onboarded 11 new customers across the consumer, MedTech, industrial and automotive segments, underscoring its ability to broaden end-market exposure and reduce dependence on a single customer base. Of these projects, five have entered commercial production, with another five slated to commence in 4QFY25, paving the way for a sequential pickup in revenue contribution from 4QFY25 into FY26.
Strategic priorities remain firmly anchored on broadening the customer base, enhancing R&D and design capabilities to drive product innovation and efficiency.
We continue to anticipate a gradual recovery from the trough orderbook observed in 1QFY25, as its key customer complete inventory drawdowns and normalise replenishment cycles heading into 2026.
Maintain HOLD.
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
