KUALA LUMPUR (Aug 21): Cnergenz Bhd (KL:CNERGEN) surged to its highest in more than three years after the manufacturing services firm reported a strong second-quarter.
Tradeview Research, one of only two houses covering the stock, remains optimistic on Cnergenz that has solid jobs on hand worth RM178 million providing revenue visibility. The research house raised its target price to 94 sen in a note while maintaining its 'buy' call on the company.
Cnergenz's mainstay business of building production lines for the electronics and semiconductor industries has recovered after zero revenue in the first quarter and "we expect this segment to continue scaling through" the second half, supporting further margin upside, the house noted.
Shares of Cnergenz rose as much as 13.5 sen or 18% to 90.5 sen at the time of writing on Friday, its highest since June 2023. At 10am, Cnergenz was trading at 89.5 sen as more than six million shares changed hands.
Cnergenz has doubled since the start of 2026, giving the company a market capitalisation of RM446 million, benefitting from supplying high-margin products and services to its clients serving the artificial intelligence (AI) infrastructure sector.
"We expect the better product mix to sustain margin recovery" into the second half, said RHB Research that also kept the stock on a 'buy' call post-results.
The research house also raised its target price to 93 sen based on higher earnings multiple of 23 times, supported by a "visible earnings turnaround, improving margin profile, and emerging AI testing opportunity".
Further, the outlook for its original design manufacturing business also remains positive with the AI-focused in-circuit tester station developed for a Tier-1 US-based automated test equipment firm having commenced mass production during the current quarter, Tradeview said.
Xlent Innovator Sdn Bhd, an automation design firm acquired in June 2024, is expected to turn profitable this year, "supported by a resilient order book and a growing pipeline, further reinforced by incremental enquiries from existing customers", the research house added.
On Thursday, Cnergenz reported that its net profit jumped nearly nine times to RM8.5 million in the second quarter from a year earlier while revenue quadrupled year-on-year to RM88.2 million.