GEORGE TOWN: Pentamaster Corp Bhd’s order book for the first quarter of 2021 is already filled up.
“Barring unforeseen circumstances such as delay in the shipment of orders, our sales for the first quarter of 2021 should improve by a double-digit percentage over the corresponding period of 2020, ” said chairman C.B. Chuah.
About 40% of the orders are for test-equipment to check the sensors used in smartphones.
“The production of existing and recently released smartphone models have ramped up. Smartphone manufacturers, therefore, require test-equipment to check the sensors used in the devices.
“The remaining orders are for the test and assembly equipment for automotive power components and automated machinery to produce medical devices.
“The book-to-bill ratio for the first period of 2021 is about 1.2. A ratio above one implies more orders were received than filled, indicating strong demand, while a ratio below one implies weaker demand, ” Chuah added.
The demand for smartphone test-equipment in 2021 looks promising.
According to research firm Canalys, smartphone shipments will drop by 10.7% year-on-year in 2020. The firm estimated the market to see a 9.9% growth in 2021, with shipments crossing 1.3 billion units globally.
Chuah said entry-level 5G smartphones, as well as 4G smartphones, will drive the demand in emerging markets.
“A Digitimes Research Report says that these devices are expected to reach over 1.5 billion units in 2023 and 1.7 billion units in 2025, ” he said.
According to Chuah, the group is likely to experience a 15% contraction in sales in 2020.
“We expect it to rebound strongly in 2021, ” he added.
According to Chuah, Pentamaster is investing over RM100mil over the next three years in a medical device plant as the company seeks to diversify into the medical device business to broaden its revenue base.
Chuah said the group is now in the process of submitting application to get approvals from the US-based Food and Drugs Agency and Malaysian Drug Agency for the new venture.
“The plant in Batu Kawan will produce single-use medical devices for the healthcare industry, targeting in particular the dual-safety pen needle and safety intravenous (IV) catheter market.
“We have invested RM40mil in the plant and are now setting up a RM60mil production facility there. The RM60mil will be spent over the next three years to produce medical devices, ” he said.
Chuah said the plant should begin operations in mid-2021 and start contributing to group revenue in 2022.
“In year 2022, the contribution should be around 10%. We are targeting a 30% contribution in 2024, ” he added.
Source: https://www.thestar.com.my/business/business-news/2020/12/28/pentamaster-order-book-for-first-quarter-filled
By DAVID TAN