Future Plans for Growth:

  • Construction of a new integrated manufacturing facility.

Acquire ~70,000 sq. ft. of land near Lahat Factories to construct a new 50,000 sq. ft. double-storey factory comprising office, assembly area, showroom, and warehouse. The facility is designed to consolidate operations, improve workflow efficiency, and accommodate multiple WIP units concurrently. Target completion and relocation by T+42 months from listing.

  • Procurement of advanced machinery for operational and demonstration use.

Purchase six units of automated machinery (e.g., laser cutting, CNC milling, TIG welding) to enhance fabrication speed and precision. Concurrently, acquire components for five demonstration units—two FOL processing and three EOL packaging solutions—to be installed at the new facility for live customer presentations.

  • Expansion of design and development (D&D) capabilities.

Scale up in-house engineering with the recruitment of one D&D manager and two engineers. Intensify R&D into robotics, IoT, AI, and machine learning to customise automation machinery in response to changing consumer preferences (e.g., pack size, product formats) and extend application into new industries such as glove and healthcare manufacturing.

M+ Fair Value

We ascribe a fair value of RM0.21 for ASM. Our fair value is derived by pegging a forward P/E of 15.0x to the mid-FY26f EPS of 1.38 sen, implying a 23.5% upside from its IPO price of RM0.17. While the assigned P/E of 15.0x reflects a ~25% discount to its closest peer, EPB Group Berhad’s trailing P/E of 20x, we believe the discount is justified given ASM’s smaller market capitalisation, coupled with its single-digit top line growth.