KUALA LUMPUR (Sept 29): Kenanga Research has issued the most bullish call yet on ACE Market-bound EcoSys (Malaysia) Bhd, setting a fair value of 54 sen per share — double its initial public offering (IPO) price of 27 sen.
The house, in a note on Tuesday, said its fair value is based on a blended 18 times EcoSys' financial year ending Dec 31, 2027 (FY2027) price-to-earnings ratio.
"The group has an established relationship with a leading global front-end semiconductor equipment manufacturer, while its abatement business is gaining traction in India, with a high single-digit number of customers secured.
"Growth will be supported by the expected doubling of its UHP [ultra-high purity] cleanroom capacity and increasing compliance-driven demand for higher-value abatement system," said Kenanga.
Kenanga forecast abatement — a system used to capture, treat and neutralise toxic, flammable and odorous gases — to account for 44% of revenue in FY2026 and 45% in FY2027, driven mainly by higher solar orders.
"As the revenue mix shifts towards proprietary abatement products with higher equipment content, this should support margins and earnings growth," said the research firm.
Currently, 38% of EcoSys' revenue comes from abatement, while 57% comes from UHP precision engineering.
Separately, TA Securities has assigned a 67% premium fair value to EcoSys, which closed its applications on Tuesday ahead of its Oct 14 listing.
The research house set a fair value of 45 sen, driven by optimism surrounding the company’s proprietary technology, strong relationships with multinational company clients and the company’s experience.
TA Securities also projected strong profit growth forecasts, with earnings growth forecasts of 5.5% to RM13.1 million for FY2026, 14% to RM15 million for FY2027, and 2.1% to RM18.1 million for FY2028.
Public Investment Bank shared this optimism but set its target price lower at 33 sen.
The research house also highlighted the company’s proprietary technology, supported by 48 patents, 36 trademarks and three wordmarks as of Aug 25, 2026.
It also highlighted the company’s growing presence in India, which contributed 35.1% of the group’s revenue in FY2025.
This comes following a 20.4% year-on-year revenue surge to RM88.8 million in FY2024 from RM73.8 million the prior year.
The Penang-based company, backed by Solarvest Holdings Bhd (KL:SLVEST), primarily creates precision engineering components and sub-assembly modules used in semiconductors and solar panel manufacturing equipment.
EcoSys’ IPO is set to raise RM39.34 million to fund expansion and improve operations, according to its official prospectus.
M&A Securities is the principal adviser, sponsor, underwriter and placement agent for the IPO, and Eco Asia Capital Advisory Sdn Bhd is its financial adviser.
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