The 1QFY2026 numbers show Aztech has put behind the lower earnings it posted in FY2025 as a key customer cut back orders, no thanks to softer global demand and a more competitive operating landscape. In FY2025, Aztech’s revenue fell 30.4% y-o-y to $432.5 million and earnings plunged 43% to $40.2 million.
UOB Kay Hian’s John Cheong sees a more positive year ahead for Aztech. “While management remains cautious on the near-term macro backdrop, earnings visibility is set to improve,” says Cheong, who has raised his target price from 58 cents to $1.32, along with a “buy” call from “hold”.
The brighter prospects are partly due to the ramp-up of new projects secured. Aztech won 27 new projects in 2025, of which only eight entered commercial production that year. “The remaining are scheduled to commence production in 2026, providing a clearer growth pipeline,” says Cheong.
In 1QFY2026, Aztech further secured six new project orders and added two new customers in the security and renewable energy segments. Also, six new project orders started commercial production.
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“These project wins and new product introduction progress support medium-term customer and revenue diversification, despite modest early-stage revenue,” says Aztech.
Aztech also has the capacity to handle higher pick-up volumes. In January, the company’s Malaysia facility obtained US FDA registration for high-value medtech.
Cheong has raised his FY2026 earnings estimate by 15% and his FY2027 estimate by 25%, underpinned by more resilient and growing customer demand. Correspondingly, Cheong’s target price has been raised to $1.32, pegged to 20 times FY2027 earnings, or a 25% discount to Singapore peers’ average of 27 times.
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Besides trading at a lower valuation relative to peers, Cheong notes that Aztech offers an attractive 5% core yield, with total yield reaching 14%–15% in 2024–2025 after including special dividends.
William Tng of CGS International has similarly upgraded his call from “hold” to “add”. “Despite the slow start to FY2026, we expect Aztech to see q-o-q improvements in the second and third quarters, based on historical trends,” says Tng, who has raised his target price to $1.14 from 78 cents. He last raised his target price to 78 cents from 66 cents on March 3.
For the current FY2026, Tng, citing Aztech’s management, warns that macroeconomic and geopolitical uncertainties will weigh on demand amid ongoing cost pressures. “Against this backdrop, Aztech will focus on progressing its net property income pipeline towards commercial production and securing new project orders from the MedTech and renewable energy segments,” says Tng.
While Tng has held his earnings forecast for FY2026 to FY2028, he has applied a higher valuation multiple on this counter, due to expected buying support from the Equity Market Development Programme. From an earlier valuation multiple of 13 times FY2027 earnings, Tng figures Aztech should fetch 19 times the average of FY2026 to FY2028 earnings, which is 3 s.d. above its five-year average P/E over FY2022 to FY2026.
Tng says re-rating catalysts include potential new customer wins and more projects from its main customer. In contrast, downside risks include order cancellations due to an economic slowdown affecting demand, and, last but not least, volatile foreign exchange rate movements affecting its financials.
Ling Lee Keng of DBS Group Research has maintained her “hold” rating and earnings estimates. Ling flags Aztech’s margin resilience will likely hinge on maintaining healthy utilisation rates, continued supplier cost management and ongoing productivity improvements from manufacturing and design enhancements.
Having said so, she has raised her target price from 67 cents to 93 cents, to reflect the “ongoing sector re-rating driven by structurally led growth in the technology space”. Her higher target price of 93 cents is based on 15 times FY2027 earnings, around +1.5 s.d. above the four‑year average.
