KUALA LUMPUR, Malaysia (July 1): In the afternoon session, frenzied purchasing of Genetec Technology Bhd shares pushed the company to an intra-day high of RM10.60, up RM2.10 or 24.7 percent. CGS-CIMB had underlined that the loss-making company, which specializes in automated industrial systems, is a proxy for the electric vehicle (EV) market, which contributed to the strong buying demand.
At the closing bell, the counter had given up some of its gains, but it had still gained RM1.52, or about 18 percent, to settle at RM10.02.
The volume of trading was 3.17 million shares, more than six times the 65-day average of 510,620 shares, and less than half of the recent high of 6.2 million shares on Tuesday.
Genetec had a market capitalization of RM504.11 million at the closing price of RM10.02. Since its low of RM1.73 on December 31, 2020, the stock has risen 479 percent.
CGS-CIMB stated in a preliminary note on Genetec on Monday that the business is one of several Bursa Malaysia-listed companies with exposure to the electric vehicle and battery space, which accounted for 93 percent of its RM205.6 million in orders obtained since February this year.
According to the research firm, the order book constituted more than two times the company’s sales for the fiscal year ending March 31, 2021 (FY21).
“While Genetec lost money in FY21, it is optimistic that the worst is behind it and expects improved returns in the future, backed by a solid order book and established connections with major EV manufacturers,” according to CGS-CIMB.
“At the end of FY21, Genetec has a net cash position of RM27.5 million,” it stated.
Due to decreased margins, greater operational costs, foreign currency (forex) losses, and one-time employee option scheme fees, Genetec’s net loss extended to RM4.25 million in FY21 from RM166,000 in FY20.
Despite increasing sales volume, the company’s revenue increased by 20.85% to RM97.08 million from RM80.33 million./n
