KUALA LUMPUR (May 28): Northeast Group Bhd (KL:NE) jumped in Thursday trading as investors cheered a stronger-than-expected quarter at the precision engineering company.
The latest results prompted all three research houses to sharply raise their target prices while maintaining their 'buy' calls on the stock. The consensus expects more upside ahead as Northeast rides on robust demand outlook for fibre optics, electronics, and semiconductors.
“We remain optimistic about the group’s outlook,” said Tradeview Research, the most bullish house on the stock with a target price of RM1.34. Growth will also be supported by additional capacity from the new factory and warehouse, the house noted.
Shares of Northeast gained as much as 15% to RM1.11, a new record high since its listing in October 2024, before ending the day at RM1.07 as nearly 10 million shares changed hands. The company’s market capitalisation was RM792 million based on the last price.
The stock has more than doubled from its lows in March, as a boom in artificial intelligence (AI) and high-performance computing drives unprecedented demand for their hardware. The average 12-month target price among the three research houses has risen to RM1.24 from RM1.03 pre-results.
Founded in 2004, the Penang-based company specialises in the manufacturing of precision engineering components used in the photonics, electrical and electronics, semiconductor, telecommunication, and optoelectronics industries.
Northeast is “increasingly monetising its indirect AI exposure,” having progressed from first-article qualification to mass production of precision-engineered components in its infrastructure, said UOB Kay Hian.
“This is spearheaded by its positioning within the supply chain of a contract manufacturer, serving a key US optical solutions provider to the world’s leading GPU player,” the house added.
For the second quarter ended March 31, 2026 (2QFY2026), the company reported a net profit of RM12.34 million, a jump of 104% from RM6.06 million in the quarter a year earlier, amid higher margins. Revenue surged 41% year-on-year to RM35.61 million with its factories operating at near-capacity.