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Genetec to expand EV battery production to Europe, North America

Genetec to expand EV battery production to Europe, North America

01 Jul 2021

Genetec Technology Bhd plans to expand its electric-vehicle (EV) battery production capacity, as well as to commission new factories in Europe and North America by the second half of 2021 (2H21).

CGS-CIMB Securities Sdn Bhd researchers Walter Aw and Mohd Shanaz Noor Azam stated in a recent report that Genetec plans to increase its annual battery production rate to 100 gigawatt per hour (GWh) by 2022 and three terawatt per hour (TWh) by 2030.

Genetec is aiming to reach 20 million EVs per year by 2030, but the amount would only account for one-third of the global EV demand.

The manufacturer stated that the new EV battery assembly lines will have a capacity to reach 20GWh annually per line.

“Based on this assumption, we think North American EV manufacturers may require up to five new lines by 2022 and potentially up to 150 lines to reach 3TWh by 2030,” CGS-CIMB report noted.

Global electric cars stock increased 43% year-on-year (YoY) to 10.2 million units last year, while the global car market sank 16% YoY due to the negative impact of the Covid-19 pandemic on the economy.

On the other hand, global electric car sales soared 51% YoY to 3.1 million units.

The International Energy Agency forecasts global electric car stock to reach up to 204 million units by 2030.

Genetec plans to invest in building a state-of-the-art manufacturing facility to meet the growing demand in EVs globally for its automation solutions.

Recently, it has managed to secure RM204.6 million worth of orders not only in EVs but also in battery, automotive, hard-disk drive and consumer electronics.

“Note that EV and battery orders made up 93% (RM189.4m) of its total secured orders (Feb 21 to date). Based on these new projects, its outstanding orderbook is 2.1 times of its total third-quarter revenue in the financial year 2021 (RM97 million). Genetec stated that the duration of these projects normally ranges from three to nine months (within 3Q22),” Aw and Mohd Shanaz wrote.

Regarding its financial performance, the manufacturing company’s revenue increased 20.9% YoY to RM97.1 million mainly supported by higher sales volume, but suffered a pre-tax loss of RM4.8 million in FY21.

The loss was caused by less profitable product mix, higher operating costs and increase in development costs for future projects, which is notwithstanding several one-off items.

“While Genetec was loss-making in FY21, it is confident the worst is over and expects stronger results going forward, backed by a strong orderbook and established relationships with global EV manufacturers. Genetec had a net cash position of RM27.5 million as at end-FY21,” the two analysts noted.

Genetec share price closed at RM8.50 yesterday, down 51 sen for the day.

Source: The Malaysian Reserve

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