This article first appeared in The Edge Malaysia Weekly on October 5, 2026 - October 11, 2026

Uchi Technologies Bhd (KL:UCHITEC) has extended its winning streak at The Edge Billion Ringgit Club (BRC) Awards to seven consecutive years, after clinching again the award for Highest return on equity (ROE) over three years in the industrial products and services sector.

The Penang-based original design manufacturer (ODM), which derives 96.7% of its revenue from electronic control systems for fully automatic coffee machines, first won the Highest ROE award in 2020 and has retained the title every year since.

During the three-year evaluation period for this year’s BRC awards, which spanned 2023 to 2025, Uchi’s ROE trended down from 64.3% in 2023 to 57.2% in 2024 and 49.1% in 2025. However, its adjusted weighted ROE over three years of 54.6% was still well above those of peers in the sector.

Uchi has also maintained a strong record of returning cash to shareholders. Since 2003, the group has maintained a policy of distributing at least 70% of its net profit as dividends. For FY2025, it declared 19.5 sen per share, for a total payout of RM90.27 million, representing a 98% payout ratio.

Prior to FY2025, the group paid a total dividend of 20 sen per share in FY2021, followed by 30 sen in FY2022 and 29.5 sen in both FY2023 and FY2024.

In FY2025, Uchi’s financial performance weakened amid a challenging operating environment, with revenue falling 17% to RM184.23 million from RM222.09 million a year earlier due to lower demand. The stronger ringgit compounded the decline, with nearly 100% of its revenue denominated in the US dollar.

Net profit fell 18.8% year on year (y-o-y) to RM92.3 million from RM113.72 million. The group said persistent geopolitical tensions, inflationary pressures and more cautious customer purchasing behaviour weighed on demand, particularly in Europe, its main market.

Apart from its Art of Living segment, Uchi also sees 3.3% of its top line coming from its Biotechnology segment, which serves high-precision weighing scales and centrifuges.

So far, FY2026 has been similarly challenging, although within market expectations. In 1HFY2026, Uchi’s net profit fell 2.7% to RM42.58 million, from RM43.78 million a year earlier, as revenue fell 8.1% y-o-y to RM82.44 million.

While the US dollar sales remained broadly stable following new model launches, analysts continue to see downside risks from inflation in the US and European markets.

Thankfully, its dividend payout remains attractive, supported by its minimum payout policy of 70% and cash balance of RM137 million.

At the time of writing, Bloomberg data showed that three analysts covered the stock. Affin Hwang Investment Bank Research had a “buy” recommendation, while Berjaya Research was “neutral” and HLIB had a “hold” call. The average 12-month target price stood at RM2.83, implying an upside of 4.04% from Uchi’s closing price of RM2.72 on Aug 28.

Looking ahead, the group expects the business environment to remain challenging in FY2026 amid ongoing geopolitical tensions, armed conflicts and global economic uncertainties, which could continue to affect global supply chains, foreign exchange movements and cost structures.

Uchi expects its US dollar revenue for FY2026 to remain broadly comparable with FY2025. Its operational resilience and disciplined cost management are expected to support profitability and a strong balance sheet.

While short-term demand cycles may remain subdued, the group sees longer-term opportunities from supply chain diversification in Asean, increasing automation and sustainability-led product innovation.

These trends are expected to drive demand for greater precision, efficiency and reliability in industrial applications, areas that align with Uchi’s capabilities, it said in its latest annual report.

The group said its priorities in 2026 are to safeguard margins, deepen customer partnerships and remain ready to capitalise on opportunities as industrial demand strengthens.

Uchi’s largest shareholder is Ted Kao De-Tsan, a Taiwanese who held indirect equity interest of 18.74% and direct interest of 0.83% as at March 16, 2026. The 68-year-old executive director founded Uchi Electronic Co Ltd in Taiwan in 1981. Eight years later, he selected Penang as the manufacturing base and founded Uchi Electronic (M) Sdn Bhd and Uchi Optoelectronic (M) Sdn Bhd.

The group also has an operating site in Dongguan City, in China’s Guangdong province.

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