KUALA LUMPUR (June 12): Engineering precision parts manufacturer CPE Technology Bhd (KL:CPETECH) is positioned to leverage the growing global industry trend of new developments of semiconductor fabrication facilities, also known as wafer fab plants, said Maybank Investment Bank (Maybank IB).
CPE Tech’s niche in making integrated gas systems (IGS), a critical tool in front-end semiconductor manufacturing, allows it to tap into the increasing demand for semiconductor equipment as global foundries expand capacity, Maybank IB said.
The research house also highlighted Japan’s semiconductor resurgence as a further catalyst for the call on CPE Tech’s profit margins, the research firm said in initiating coverage on the company with a “buy” call.
This report marks the manufacturing company’s first-ever analyst coverage since its listing on the Main Market in December 2023.
“Despite tariff uncertainties, CPE is able to capture incremental demand for front-end semicon equipment, leveraging on its strong foothold in the IGS supply chain with added upside from Japan’s semiconductor revival through its Japanese IGS customers,” said Maybank IB.
IGS modules are key components in gas delivery systems, designed to reduce space requirements and simplify maintenance in chipmaking cleanrooms.
The firm added that CPE Tech is currently expanding its capacity by 21% through a new plant, with utilisation rates at 90% to 95%, leveraging the company to scale earnings as new orders ramp up.
CPE Tech manufactures precision-machined parts and components and provides computer numerical control machining services. Its clientele spans multiple sectors, including semiconductors, life sciences, medical devices and sports equipment, with key customers located in the US, Singapore and Malaysia.
The semiconductor sector demand boom already drove the Johor-based group’s net profit to more than double to RM20.4 million or 3.04 sen per share for the nine months ended March 31, 2025 (9MFY2025), amid a 44.5% growth in revenue to RM96.71 million.
Maybank IB has a target price of RM1 and forecast a three-year earnings compound annual growth rate of 32% from FY2024 to FY2027, believing that CPE Tech “offers a long-term demand play, with strong visibility from 2026”.
At Thursday’s noon break, the counter rose three sen or 3.9% to 80 sen, giving it a market capitalisation of RM533.7 million.
