Grand Venture Technology, whose share price has dropped by around 10% following the US tariffs, is reaffirming its 1HFY2025 revenue guidance at between $90 million and $96 million.

 

The company points out that in FY2024 ended Dec 31, 2024, direct exports to US were less than 10% of its total revenue and does not expect a significant increase in US-bound exports in FY2025. 

 

In addition, more than 70% of these exports originated from Singapore, which is subject to the lowest applicable tariff under the latest trade measures albeit on a 90-day pause.

 

According to GVT, it is actively engaging customers to redirect the majority of US-bound exports to their manufacturing sites in Asia, thereby mitigating potential disruptions or cost impacts. 

 

The remaining portion of US exports are primarily related to so-called new product introductions, limited in volume and part of planned transitions for products expected to scale up in Asia over time to serve regional demand.

 

The company adds that its products are used predominantly to support customers within Asia, particularly in semiconductor and life sciences applications. 

 

" Also, aerospace-related products are mainly bound for Europe, further diversifying end market exposure across geographies," the company adds.

 

" GVT remains in constant dialogue with key customers to stay informed on any changes in sourcing strategies or operational requirements and is prepared to adjust accordingly with the agility to respond quickly to different scenarios. 

 

" We remain focused on executing our strategic priorities that is backed by a resilient business model, positioning us well to navigate the evolving global dynamics while continuing to deliver sustainable and long-term growth. 

 

For FY2024, GVT reported revenue of $159.5 million, 43.3% higher y-o-y and a new high for the group. The figure also stood 3.3% above GVT' s full-year guidance of $154.3 million.

 

The record revenue trnslated into FY2024 earnings of $14.4 million, 9.3 times higher than FY2023&rsquo s earnings of $1.5 million.

 

Grand Venture Technology (GVT) has reported earnings &ndash or total comprehensive income for the financial year attributable to owners of the company &ndash of $14.4 million for the FY2024 ended Dec 31, 2024, 9.3 times higher than FY2023&rsquo s earnings of $1.5 million, due mainly to record revenue during the year. Earnings per share (EPS) stood at 3.21 cents on a basic and diluted basis.

 

FY2024 profit after tax (PAT) stood at $10.9 million, 96.4% higher than FY2023&rsquo s PAT of $5.5 million. The difference in the bottom line, however, was due to currency translation differences arising from the consolidation of foreign operations. In FY2024, this stood at a positive $3.5 million compared to a negative translation of $4 million in the year before.

 

Adjusted net profit rose by 86% y-o-y to $11.2 million.

 

During the year, GVT reported revenue of $159.5 million, 43.3% higher y-o-y and a new high for the group. The figure also stood 3.3% above GVT' s full-year guidance of $154.3 million. The revenue surge was attributed to healthy demand seen across all segments.

 

Gross profit in FY2024 rose by 40.3% y-o-y to $39 million even though gross profit margin dipped by 0.5 percentage points y-o-y to 24.5%. The slightly lower margin was mainly attributable to higher expenses from the onboarding of new customers as well as a one-off $0.7 million provision for inventory and write-down. Excluding non-recurring items, the gross profit margin would have been 24.9%.

 

Ebitda for the year rose by 29% y-o-y to $28.8 million while ebitda margin fell by two percentage points y-o-y to 18.1%.

 

Segmentally, semiconductor revenue grew by 64.9% y-o-y to $87.8 million, contributing 55% to the group&rsquo s total revenue. The growth was due to strong demand for high-bandwidth memory (HBM) testers and the commencement of mass production for GVT&rsquo s front-end customers. The demand is expected to accelerate in 2025 and beyond.

 

According to the group, GVT&rsquo s additional involvement in advanced semiconductor manufacturing technologies, including through-silicon via (TSV), thermal compression bonding (TCB), hybrid bonding (HB), and HBM will be &ldquo key drivers&rdquo for its future growth.

 

GVT&rsquo s life sciences segment saw revenue increase by 11.3% y-o-y to $22.9 million, contributing 14.4% to its overall revenue. The higher revenue was due to increasing wallet share gain from new projects being qualified with key customers, which stemmed from the shift in the supply chain to Southeast Asia.

 

The electronics, aerospace, medical and other segment saw revenue increase by 30.3% y-o-y to $48.8 million, contributing 30.6% to the group&rsquo s total revenue. The increase was attributed to the strong demand in the aerospace and medical segments and contributions from GVT&rsquo s acquisition of ACP Metal Finishing in FY2024.

 

&ldquo The addition of ACP would strengthen our competencies to penetrate deeper into the front-end semiconductor segment and enlarge our service offerings in aerospace, positioning us well to capitalise on rising demand due to the overall commercial plane order backlog and shortage of qualified suppliers within this region,&rdquo says GVT.

 

&ldquo GVT&rsquo s strategic investments in capabilities and capacity to position ourselves well for next-generation semiconductor packaging and artificial intelligence (AI)-driven solutions are delivering strong results. The rapid adoption of AI and high-performance computing (HPC) is driving demand for advanced packaging, where we are playing a critical role in producing solutions for leading applications such as TSV, TCB and HBM solutions,&rdquo says Ricky Lee, executive deputy chairman of GVT.

 

&ldquo At the same time, our expanding presence in life sciences and aerospace reinforces our diversification strategy that is further strengthened by our ACP acquisition, reinforcing our diversification strategy and enhancing our capabilities in high-value segments,&rdquo he adds.

 

The group has proposed a final dividend of 0.3 cents per share, up from last year&rsquo s dividend of 0.1 cents per share.

 

The dividend will be subject to GVT&rsquo s shareholders&rsquo approval at its upcoming annual general meeting (AGM) and will be payable on May 23.

 

With the global semiconductor industry undergoing rapid transformation, GVT is guiding for its 1HFY2025 revenue to be between $90 million and $96 million, representing a y-o-y growth between 31.7% and 40.5%.

 

Observers are keenly anticipating the continuation of the semiconductor industry&rsquo s upcycle this year, and players like Grand Venture Technology (GVT) are expected to benefit.

 

Having originally carved its niche in back-end semiconductor manufacturing, such as wire bonding and chip testing, GVT has since expanded into the front-end domain, offering services like metrology and etching. Today, revenue from its semiconductor segment continues to make up the lion&rsquo s share, at 53.2% or $59.5 million of the total $111.9 million for the nine months ended Sept 30, 2024, driven by GVT winning new contracts and growing wallet share.

 

On Dec 19, 2024, the manufacturer further strengthened its position in the space, securing a significant contract to supply parts and components for next-generation thermal compression bonding (TCB) equipment to a &ldquo leading global semiconductor assembly and packaging equipment manufacturer&rdquo .

 

According to GVT, this customer&rsquo s equipment plays a critical role in advanced semiconductor packaging for next-generation chips destined for use in data centres, graphics cards, AI accelerators, mobile application processors and high-bandwidth memory (HBM).

 

The Singapore-listed player sees the advanced packaging market as a lucrative space, citing research from Yole Intelligence, a tech-focused strategic development firm. The market is expected to expand at a CAGR of 11% between 2023 and 2029, reaching US$69.5 billion ($94.6 billion) by the end of the period.

 

Following this win, analysts Amanda Tan and Ling Lee Keng of DBS Group Research note in their Jan 6 report: &ldquo Overall, with generative AI as one of the key driving forces, we see multiple growth engines powering the semiconductor segment for both new front-end customers as well as existing back-end customers, which we anticipate will lift semiconductor segmental revenues by 30% to $100.4 million in FY2025 and 30% to $130.6 million in FY2026 respectively.&rdquo

 

Beyond semiconductors, GVT has also expanded into other segments through a series of M& A to diversify risk away from the cyclical nature of its key segment.

 

In 9MFY2024, GVT&rsquo s electronics, aerospace and medical segment was its second-largest contributor, accounting for 32.3% of revenue at $36.1 million and increasing 32.8% y-o-y from 9MFY2023&rsquo s $27.2 million. This was followed by the life sciences segment at 14.5% or $16.2 million, increasing 3.4% y-o-y from $15.7 million in 9MFY2023.

 

GVT has also begun to move into advanced ceramics, announcing its partnership with the Agency for Science, Technology and Research (A*Star) on Jan 13 to develop a customised manufacturing platform for high-value advanced ceramics.

Further bolstering this diversification strategy are the cross-segment capabilities of GVT&rsquo s acquired businesses. For instance, GVT&rsquo s $17 million acquisition of surface treatment specialist ACP Metal Finishing on March 26, 2024, allows the group to apply surface treatment to prevent corrosion in specific components used in semiconductors and parts used in the aerospace industry.

 

With this, Tan and Ling have kept &ldquo buy&rdquo and raised their target price on the stock to $1.04 from 70 cents previously. They write: &ldquo Beyond the semiconductor segment, aerospace momentum remains healthy while resilience in life sciences and medical segments should help offset softness in the electronics segment, which is being impacted by weak end-consumer demand.&rdquo

 

The market has seemingly agreed with the views of the DBS analysts, with GVT&rsquo s share price closing on Jan 16 at 84.5 cents, a 32.03% surge over the past month.

 

As the global semiconductor market looks to return to its upward trajectory, the manufacturer looks set for brighter days, particularly given its foray into serving the front-end and specifically wafer fab equipment market, which Tan and Ling understand is &ldquo eight times larger&rdquo than the back-end semiconductor equipment market.

 

Another kicker for GVT going forward might be its secondary listing on Malaysia&rsquo s Bursa, first flagged last September. Bursa saw 55 new listings in 2024 but could do with GVT&rsquo s addition as well.

Singapore chip-gear maker GVT says AI boom far from over

Demand for artificial intelligence chips (AI) is set to grow in the coming years as health care, education and financial sectors adopt more services from AI agents such as Microsoft Corp.&rsquo s Copilot, said Julian Ng, chief executive officer of Singapore-based GVT. That&rsquo s a boon for up-and-coming equipment suppliers such as GVT, as chipmakers need to invest in their production systems.

&ldquo We are riding on the AI wave,&rdquo Ng said in an interview. Those saying  AI is a bubble  are wrong because many industries are yet to adopt the technology, he said.

While still a niche player in the chip ecosystem, GVT has tripled its annual revenue &mdash and stock price &mdash since its 2019 stock market debut in Singapore. It&rsquo s benefited from the industry&rsquo s growth in Asia, selling chipmaking tools for factories from Malaysia to China.

Asia will remain the primary location for the global chip supply chain despite efforts from the US and Europe to build chip plants on their home turf, according to Ng.

&ldquo Moving back will not be that straightforward, because you will need years of qualification and understanding where your ecosystem is,&rdquo he said.

GVT develops technologies such as hybrid bonding so more layers of chips can be stacked in a single package, improving the efficiency of the product. The technology is key in the production of sophisticated semiconductors, including high-bandwidth memory chips. HBM chips are widely used in AI computing to offer faster data access speed with lower energy consumption.

An array of chipmakers are ramping up chip output in Southeast Asia. Last week, Micron  announced  a US$7 billion plan to make HBM chips in Singapore. Germany&rsquo s Infineon is building a new plant in Thailand for power modules after starting to make data centre chips in its US$7.2 billion plant  in Malaysia last year.

Yet President-elect Donald Trump&rsquo s tariff policies cast uncertainties to  the industry. Weak consumer demand and an economic slowdown in China could also affect the capital expenditures of the biggest chipmakers such as Samsung Electronics  and Intel, Citigroup analysts Atif Malik and Elizabeth Sun warned last week.

GVT is  looking to add  a second stock listing in Kuala Lumpur to diversify its investor base. Ng didn&rsquo t disclose details of the planned listing, but said any money raised will help the company to grow its business and fund potential acquisitions of advanced material firms.