KUALA LUMPUR (Aug 23): Shares of Genetec Technology Bhd (KL:GENETEC) plunged on Friday to their lowest in more than three years in active trade amid broad decline in the technology sector.
Genetec fell as much as 26% or 37 sen to RM1.05, its lowest since July 2021. At 9.45am, the counter was trading at RM1.15, on course for the nine consecutive sessions of decline. Trading volume totalled 26.9 million shares so far, more than seven times the 200-day moving average. The sharp decline also triggered a temporary suspension in intraday short selling of the stock for the rest of the day.
The continuous sell-down since Aug 13 has wiped out nearly RM614 million from its market value, and at its last price, the company has a market capitalisation of RM893 million.
CIMB Securities, one of only three research houses covering the stock, on Friday warned of a 30% decline in Genetec’s earnings for the year ending June 30, 2025 (FY2025) because of delays in new order wins from one of the automotive manufacturers adopting a more cautious approach to capacity expansion.
The research house downgraded the stock to ‘hold’ from ‘buy’ and lowered its target price to RM1.60 from RM3.70.
"We are turning cautious about Genetec’s business outlook," CIMB Securities said, flagging policy uncertainties ahead of the US presidential election and moderating growth outlook in the global electric vehicle market.
Market watchers, meanwhile, mostly attributed Tesla’s order deferments as the main reason though there are also fears that Genetec’s upcoming quarterly results due by this month end could come in below consensus estimates.
Genetec is heavily owned by institutional investors. Among the top 30 largest shareholders, 13 are fund managers, an analysis of the company’s shareholdings show.
Among the institutional investors, the Employees Provident Fund currently has the largest stake at 9.33% followed by Principal Global Investors LLC with 5.33%, Hong Leong Asset Management Bhd 5.02%, Norges Bank Investment Management 4.45% and Kenanga Investors Bhd 1.52%.
Genetec’s co-founder Aaron Chen Khai Voon has trimmed his stakes in the company by 2.25% to 7.39% between May and July, according to exchange filings.