Aztech Global&rsquo s wholly-owned subsidiary has sold its property in Gelang Patah, Johor, Malaysia for a consideration of RM28.75 million ($8.73 million) to an independent third party.

 

The property has a land area of about 8,092 square meters (sqm) and a built-up area of approximately 10,304.8 square meters. No valuation was carried out in connection with the sale.

 

Aztech says that the property has remained vacant following the group&rsquo s successful consolidation of its operations at its manufacturing facility located in Pasir Gudang, Malaysia that sits within the Johor-Singapore Special Economic Zone.

 

The sale would provide funds for the group&rsquo s future acquisition of additional manufacturing facilities in the vicinity of Pasir Gudang, says Aztech.

 

Upon completion of the sale, Aztech will report a net gain of RM13.7 million.

 

William Tng of CGS International has reiterated his " reduce" call and 41 cents target price for Aztech Global, as he believes the outlook for the rest of this year remains weak for the company.

 

US consumers, according to Tng, are in a cautious mood due to the trade war and general concerns over their economy.

 

Excess inventories ordered by Aztech' s key customers accumulated during the pandemic is not helping too, he adds.

 

As described by Tng in his June 16 note, Aztech&rsquo s customers are mainly US companies, and its main production base will be in Malaysia henceforth instead of China.

 

Via its 300,000 sq ft plant at Pasir Gudang in Johor, Aztech has the capacity to take on more business if the opportunity arises.

 

" We think US companies are reassessing their supply chains in Asia, with Malaysia likely still a beneficiary despite the worry of reciprocal tariffs," says Tng.

 

He adds that Aztech still has $110 million in unused proceeds from its March 2021 IPO to fund further capacity expansion if needed.

 

At the same time, its currently vacant 86,000 sq ft plant at Gelang Patah, Johor could also be mobilised to support new customers if needed.

 

Meanwhile, Aztech' s plant in Dongguan, China, is only operating at an average of 30% of its previous capacity following a rationalisation of its production activities there.

 

Nonetheless, the company is not making a full exit from Dongguan given the still robust electronics manufacturing supply chain in China.

 

For now, Tng is staying cautious. Aztech, in its 1QFY2025 business update, highlighted that it has 5 new customers but Tng says their volume will not be " significant" this current FY2025.

 

" Efforts to diversify into other product lines at its key customer will take longer than FY2025," he says.

 

Order flow this year will remain weak, posing downside risks to Aztech' s earnings, warns Tng.

 

Tng continues to value this stock at its 4-year average P/E of 8.4x FY2026 earnings estimates, thereby deriving his target price of 41 cents.

 

Upside risks include potential new customer wins and winning more projects from its main customer, and a potential one-time gain if Aztech disposes of its vacated plant at Gelang Patah.

 

On the other hand, derating catalysts include order cancellations due to economic slowdown affecting demand, and volatile foreign exchange rate movements affecting its financials.

 

In addition, Tng is specifically flagging the over-reliance risk from Aztech' s single largest customer. If orders from this customer do not recover or drop further, this could hurt the company' s earnings significantly.

Earnings per share for the period comes in at S$0.002, down from S$0.0206 a year ago

 

KEY POINTS Q1 2025

 

Revenue: S$42 million (-67.3%)

 

Net profit: S$1.5 million (-90.6%)

 

[SINGAPORE] Aztech Global&rsquo s net profit for the quarter ended Mar 31, 2025, fell 90.6 per cent to S$1.5 million, from S$15.9 million in the corresponding period in the previous year.

 

This came as revenue for the period declined 67.3 per cent year on year to S$42 million from S$128.6 million, due to reduced customer demand in the quarter, said the Internet of Things device manufacturer in a bourse filing on Tuesday (Apr 15).

 

This marks the third consecutive time that the group reported a profit drop.

 

Earnings per share for the quarter came in at S$0.002, down from S$0.0206 a year ago.

 

The mainboard-listed company highlighted its &ldquo prudent capital expenditure&rdquo . As at end-March, its net cash position was S$315.7 million, with its net asset value per share remaining at S$0.44.

 

&ldquo As part of its customer base expansion initiative, the group is positioning its Malaysia facility as the manufacturing partner for customers looking to mitigate supply chain risks arising from geopolitical and tariffs uncertainties,&rdquo said the group.

 

It has secured five new customers from the consumer, health tech and industrial segments during the quarter, with commercial production scheduled to start from the second half of 2025.

 

Michael Mun, executive chairman and chief executive officer of Aztech Global, said: &ldquo We are focused on developing our capabilities, enhancing our competitiveness and diversifying our customer base. With strong manufacturing footprint, we will be looking to tap on opportunities that might arise from the current challenging situation.&rdquo

Payout is an increase of 87.5% from the amount distributed in 2023

 

DESPITE its profit dropping from S$57.1 million to S$23.9 million in the second half of 2024, Aztech Global almost doubled its dividend for the full year ended Dec 31.

 

The Internet of Things device manufacturer said on Tuesday (Feb 25) that it was rewarding shareholders after accumulating a cash reserve of S$311.3 million due to its disciplined approach towards cash and capital management over the years.

 

Aztech Global declared a total dividend of S$0.15 per share for the financial year, an increase of 87.5 per cent from the S$0.08 per share dividend distributed in 2023.

 

Group revenue fell 51.1 per cent to S$248.4 million in H2, as the group recorded a lower sales volume of devices and data communication products due to decreased demand from customers, it said.

 

Earnings per share fell to 3.1 Singapore cents, from 7.4 Singapore cents in the year-ago period. 

 

For the full year, net profit stood at S$70.5 million, down 29.5 per cent from S$100 million. Revenue declined 30.6 per cent to S$621.6 million. 

 

The group said: &ldquo Amid rising trade restrictions, geopolitical tensions and global economic uncertainties, the group is encountering some demand volatility from customers. (It) is prioritising expanding its customer base, strengthening relations with existing customers, managing its cost as well as enhancing its design and manufacturing capabilities. 

 

&ldquo It will continue with digital transformation and automation to optimise operational efficiency.&rdquo

 

Aztech Global said that five new products entered commercial production in the final quarter of 2024. 

 

In addition, the group secured seven new customers during the year with commercial production expected in the current financial year.

 

&ldquo The group will also explore merger and acquisition opportunities to expand its customer base,&rdquo it said. 

 

Aztech Global declared a dividend of S$0.10 per share, comprising a final ordinary dividend of S$0.03 per share totalling S$23.2 million and a special dividend of S$0.07 per share totalling S$54 million. It also declared an interim dividend of S$0.05 per share.