KUALA LUMPUR (April 18): Shares of PIE Industrial Bhd extended its rally to a new all-time high on Thursday, after Kenanga Investment Bank flagged that the electronic services firm has secured a new client that will take up the entirety of its largest facility.

PIE Industrial surged as much as 20.2% to RM5.96, adding to its 30% gain on Wednesday. The stock closed at RMRM5.57, still up 63 sen or 13%, at the closing bell after with more than 12.5 million shares changed hands. In contrast, the country’s benchmark index FBM KLCI was 0.3% higher.

“PIE, via referral from a key shareholder, has secured a new sizeable AI server client that will take up the entire Plant 6,” Kenanga, one of only three analysts covering the stock, wrote in a note. “We understand that PIE will be the new customer’s sole contract manufacturer outside of China.”

The client was undisclosed. Contract manufacturers typically do not identify their clients due to confidentiality agreements to protect manufacturing processes.

The research house raised its net profit forecast for the year ending Dec 2025 by 10% and its target price by 69% to RM6.75, while keeping PIE on "outperform", equivalent to a "buy" call. Affin Investment Bank also has a "buy" rating while Mercury Securities has the stock on "hold".

Shares of PIE have surged more than 50% so far this year and sharply outperformed its peers in the electronic manufacturing services segment thanks to the two-day surge.

“We also understand that this is part and parcel of the key shareholder’s diversification strategy,” Kenanga said. “A fast-track project, the qualification processes will be completed followed by small production before the year is out, paving the way for mass production in 2025.”

Plant 6, spanning 280,000 square-feet, will ultimately produce about one-third of the new customer’s global volume, the research house noted.

PIE’s Plant 5, meanwhile, has been completed and is in the final stages of equipment installation, Kenanga said. The plant, which will be dedicated to another unnamed client which currently occupies the entirety of Plant 3, is set to start operations by the end of May, it said.

Further, the company has also brought in four smaller customers — to collectively account for 8%-12% of total revenue in FY2024 — with products related to drones for light shows, diagnostic devices for oral cancer, smart home and industrial sensors, Kenanga added.