Strong supercomputer orders drive PIE's recovery

The Star

20 hours ago

Maybank IB said it has kept its forecasts unchanged and remain constructive on PIE's outlook.
PETALING JAYA: PIE Industrial Bhd will likely see a recovery in its earnings in the third quarter of financial year 2025 (3Q25) on stronger order loadings for its supercomputers, says Maybank Investment Bank (Maybank IB).
A quick update with PIE revealed that the group began the year on a strong footing, supported by solid order loadings from a supercomputer customer in 1Q25, which contributed 37% of 1Q25's revenue.
'That said, we expect a slight moderation in 2Q25 orders due to softer market sentiment, which affected the demand for its products during the period.
'However, we expect volumes to rebound in 3Q25, returning towards 1Q25 levels as demand shows signs of recovery,' Maybank IB said in a report yesterday.
The research house also noted that PIE's prospective customers remained cautious, opting to delay purchase decisions until there is clarity on the implementation of the delayed US tariffs, which will resume on July 8.
On a positive note, PIE had completed a pilot run for a new US-based switches customer secured via Vietnam+1 efforts although the final decisions had also been deferred due to ongoing tariff uncertainties.
Maybank IB said: 'We leave our forecasts unchanged and remain constructive on PIE's outlook, underpinned by potential new customer wins and the upcoming commissioning of plant six.'
The research house also kept the stock's target price unchanged at RM4.70 per share.
Key risks to the group include weaker demand, operational delays (including customer onboarding and ramp-up), customer concentration, rising costs and adverse trade policy developments.