EcoSys (Malaysia) Berhad, a Simpang Ampat-based supplier to the pan-semiconductor industry, is drawing attention from Malacca Securities for a business mix shifting toward higher-margin abatement systems. The research house’s report, published 28 September 2026, projects core PATMI climbing from RM11.1m in FY26 to RM16.4m by FY28, a 13.6% CAGR.
What EcoSys Malaysia Berhad Actually Does
The company runs two segments: ultra-high-purity (UHP) fabrication of precision engineering components, and proprietary abatement systems that capture and neutralise harmful process gases from semiconductor manufacturing. Malacca Securities noted abatement generated RM46.0m revenue and RM13.7m gross profit in FY25, a 29.9% gross margin versus 19.5% for UHP.
Abatement supplied roughly 93% of the group’s incremental revenue in FY25, according to the research house. Every additional ringgit of abatement sales generates about 10 sen more gross profit than the equivalent UHP sale, Malacca Securities calculated.
The Numbers Behind the India Growth Story
India contributed RM38.2m, or 35.1%, of group revenue in FY25, up sharply from RM6.3m in FY24. Malacca Securities highlighted that EcoSys secured seven new Indian abatement customers during the review period, with five identified as investing in solar-related manufacturing.
One customer alone, identified as Customer F, generated RM22.2m of abatement-system revenue across India and Singapore — 20.4% of group sales, per the report. Group commissions paid to overseas sales representatives, including India-based Zuvay, rose from RM0.129m in FY24 to RM3.495m in FY25, reflecting the cost of chasing this expansion.
Order Book and Valuation Basis
Malacca Securities pointed to RM94.3m in secured purchase orders as of 25 August 2026, split between RM63.4m for FY26 delivery and RM30.9m for FY27. System deliveries rose from 99 units in FY24 to 194 in FY25, expanding the installed base that could generate follow-on module and service sales.
The research house’s RM0.32 fair value applies a target P/E of 14.9x to mid-FY27 core EPS of 2.14 sen. That multiple represents a 50% discount to the peer average forward P/E of 29.7x, Malacca Securities said, reflecting a conservative stance despite the growth narrative.
Part of the capital story ties back to the IPO itself: RM17.0m of proceeds is earmarked for abatement components and modules to shorten lead times by up to four weeks, while RM2.1m funds UHP equipment for in-house chemical cleaning and surface treatment.
Risks Flagged in the Report
Malacca Securities cautioned that the undisclosed segment mix within the RM94.3m order book limits visibility into associated gross profit. Customer scheduling and acceptance also influence the timing of revenue recognition, meaning delays could push earnings between financial years.
Rising commission costs tied to Indian sales growth are already absorbing part of the gross-margin gain from abatement, the research house observed. Dependence on a concentrated customer base, including the RM22.2m contribution from Customer F, also exposes earnings to order timing from a small number of solar-manufacturing clients.
What This Means for Retail Investors
Retail investors weighing EcoSys shares against its RM0.27 IPO price can use Malacca Securities’ RM0.32 fair value as one reference point, not a guarantee. The 14.9x target multiple sits well below sector peers at 29.7x, suggesting the research house is pricing in execution risk around the untested India expansion and order-book conversion.
Those following the counter should track quarterly abatement revenue mix and India-linked order deliveries against the RM63.4m FY26 schedule, since Malacca Securities flagged timing risk as central to whether forecasts materialise.
Key Takeaways
- Malacca Securities assigns EcoSys (Malaysia) Berhad a fair value of RM0.32, an 18.5% premium to its RM0.27 IPO price.
- Core PATMI is forecast to grow from RM11.1m in FY26 to RM16.4m in FY28, a 13.6% CAGR.
- Abatement systems carried a 29.9% gross margin in FY25 versus 19.5% for UHP, driving 93% of incremental revenue.
- India revenue jumped from RM6.3m in FY24 to RM38.2m in FY25, led by solar-manufacturing customers.
- Secured purchase orders of RM94.3m span FY26 (RM63.4m) and FY27 (RM30.9m), anchoring near-term delivery visibility.
Frequently Asked Questions
What is Malacca Securities’ target price for EcoSys (Malaysia) Berhad?
Malacca Securities has set a fair value of RM0.32 per share, implying an 18.5% upside from the IPO price of RM0.27. This is based on a 14.9x P/E multiple applied to mid-FY27 core EPS of 2.14 sen.
Why is abatement more important than UHP for EcoSys’s earnings?
Abatement systems generated a 29.9% gross margin in FY25 compared with 19.5% for UHP, and contributed about 93% of the group’s incremental revenue, according to Malacca Securities. Each ringgit of abatement sales produces roughly 10 sen more gross profit than UHP sales.
How much has India contributed to EcoSys’s revenue?
India generated RM38.2m, or 35.1% of group revenue in FY25, up from just RM6.3m in FY24, per the research house’s figures. Seven new Indian abatement customers were secured during the review period, five of them tied to solar-related manufacturing.
What order visibility does EcoSys currently have?
The company held RM94.3m in secured purchase orders as of 25 August 2026, with RM63.4m scheduled for FY26 delivery and RM30.9m for FY27, Malacca Securities noted. The segment mix behind these orders was not disclosed, limiting visibility into associated margins.
What risks did Malacca Securities highlight for EcoSys?
The research house flagged customer scheduling and acceptance timing as key to converting the order book into recognised revenue. It also noted rising commission costs from Indian sales activity and customer concentration risk, with one client accounting for 20.4% of FY25 group sales.
Source & Attribution
This article summarises a research report published by Malacca Securities Sdn Bhd (M+ Online) on 28 September 2026. All ratings, target prices and forecasts belong to Malacca Securities Research, not to the author of this blog.
Read the original report: M+ Online Research Report | View full PDF
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Ratings and target prices cited are those of Malacca Securities Research and are subject to change. Always do your own research before making investment decisions.
Want access to full M+ Online research reports and AI stock analysis? Contact Dexter Chia, AI-Driven Remisier at Malacca Securities Sdn Bhd. M+ Global Invitation Code: UBZQ | WhatsApp: +60169059789 | Why Choose Dexter?
