KUALA LUMPUR (Nov 5): Pentamaster Corp Bhd (KL:PENTA) reported a 19.6% year-on-year increase in third-quarter net profit, driven by stronger demand for factory automation solutions (FAS), particularly from the artificial intelligence (AI) computing sector.

The Penang-based automation equipment manufacturer's net profit rose to RM20.46 million for the three months ended Sept 30, 2026 (3QFY2026), from RM17.11 million a year earlier, according to its bourse filing on Thursday.

Quarterly revenue surged 51.3% to RM224.05 million from RM148.08 million, with AI Compute accounting for nearly half of the group's revenue during the quarter.

Pentamaster attributed the stronger profitability to improved operating leverage, better absorption of fixed overheads following higher revenue, and a more favourable sales mix with improved project margins.

No dividend was recommended for the quarter.

For the first nine months of FY2026 (9MFY2026), Pentamaster's net profit rose 37.4% to RM57.42 million from RM41.79 million a year earlier, while revenue increased 37.9% to RM585.27 million from RM424.56 million.

The nine-month revenue has already surpassed the RM583.68 million recorded for the whole of FY2025, while the group's profit after tax of RM85.57 million is approaching the RM91 million achieved last year.

Pentamaster co-founder and group executive chairman Datuk Chuah Choon Bin expects the company to register double-digit revenue growth for FY2026, supported by its outstanding order book of RM500 million.

"Backed by a RM500 million outstanding book order, we expect to achieve a double-digit percentage growth over 2025," Chuah said.

The FAS segment remained the group's largest revenue contributor in 3QFY2026, with revenue surging 68.9% to RM171.63 million from RM101.64 million a year earlier, driven mainly by deliveries of automation solutions for AI server assembly production lines.

The automated test equipment (ATE) segment recorded a 31.2% increase in revenue to RM50.60 million from RM38.56 million, supported by higher deliveries in the automotive and electro-optical sectors, alongside contributions from AI Compute.

However, revenue from the healthcare segment fell 39.3% to RM5.92 million from RM9.74 million a year earlier, reflecting lower sales of medical devices and differences in customer order volumes and delivery schedules.

The healthcare segment also recorded a wider pre-tax loss of RM6.4 million, compared with RM3.8 million a year earlier, due to lower revenue and continued operating costs associated with its expansion.

By customer segment, AI Compute contributed RM108.12 million, or 48.3% of total third-quarter revenue, followed by medical at RM62.33 million (27.8%) and automotive at RM32.15 million (14.3%).

Looking ahead to FY2027, Chuah expects AI computing, comprising advanced chip and system packaging, to account for about 48% of the group's revenue, while the medical segment is projected to contribute 28%.

The automotive power silicon carbide and electro-optical businesses are expected to contribute a combined 20% of revenue in 2027, he said.

To accommodate higher project volumes, Pentamaster is expanding its Campus 3 manufacturing facility in Batu Kawan, Penang, by renovating approximately 120,000 sq ft of previously unused production space, primarily for AI Compute and medical operations.

Chuah said the group's third plant would be used for AI chip and medical equipment production.

“Our capital expenditure for 2027 will be about RM30 million,” he added.

On Thursday, Pentamaster shares closed 43 sen, or 7.71%, lower at RM5.15, valuing the group at RM3.67 billion.