GREATEC rides RM1.8bn order book as AI slowdown clouds tech

Wall Street is treading water ahead of the Federal Reserve’s September interest rate decision, but local opportunities are emerging for investors willing to look beyond the AI slowdown noise. GREATEC’s RM1.8bn order backlog—equivalent to 2.4 times its FY25 revenue—offers rare visibility in a sector often clouded by uncertainty, according to research published by Malacca Securities on 15 September 2026.

The research house’s analysis comes as the US tech sector stumbled on Monday, with the Nasdaq retreating 0.6% after executives at Anthropic and OpenAI called for a deliberate slowdown in frontier language model development over safety concerns. That noise, however, masks a critical shift happening in GREATEC‘s pipeline: data centre-related work now represents more than half of its outstanding contracts, insulating the company from near-term AI rhetoric while positioning it for sustained revenue growth.

What GREATEC Does and Why Order Book Matters

GREATEC is a factory automation solutions provider whose contracted work increasingly flows from hyperscale data centre operators preparing infrastructure for AI deployment. The distinction matters: while sentiment around AI development may wobble on headlines, the physical buildout of power, cooling, and connectivity infrastructure must continue regardless of software timelines.

Malacca Securities noted that GREATEC’s RM1.8bn order book extends visibility well into FY26 and beyond, with management guiding towards a RM2.0bn target by year-end. This progression—from 2.4x to an implied 2.7x-plus multiple of FY25 revenue—reflects accelerating contract wins in the data centre vertical, a segment typically characterised by longer deployment cycles and stickier customer relationships than traditional factory automation work.

Revenue Backlog and Growth Trajectory

The presence of RM1.8bn in contracted work means GREATEC faces lower execution risk compared to peers relying on project wins announced quarter to quarter. According to Malacca Securities’ research, data centre-related jobs now account for more than half of this backlog, a structural shift that de-risks the company’s revenue forecasts even if the broader AI sentiment debate persists through 2026 and into 2027.

Management’s guidance for a RM2.0bn order book by year-end implies RM200 million in net new contract awards over the next few months. This confidence underscores the strength of underlying demand from major data centre operators, despite rhetorical calls for AI development slowdowns from industry figures.

Valuation and Investment Thesis

Malacca Securities continues to favour GREATEC based on the combination of order book visibility, margin expansion potential as data centre contracts typically command higher pricing power, and the secular tailwind from infrastructure buildouts across Asia-Pacific. The research house did not disclose a formal target price or rating in the excerpt reviewed, but framed GREATEC as a defensive automation play for investors uncomfortable with headline tech volatility.

The RM1.8bn backlog provides a quantifiable floor for near-term revenue, reducing the need to call near-term inflection points or guess at market sentiment shifts. This is particularly valuable for retail investors seeking stocks with tangible, contractually-backed growth drivers.

What This Means for Retail Investors

GREATEC offers a way to gain exposure to data centre infrastructure demand without direct exposure to semiconductor or AI software volatility. The order book visibility reduces guesswork around execution and allows investors to underpin conviction with hard contract numbers rather than market sentiment.

However, investors should monitor whether management delivers the RM2.0bn order book target and maintains its data centre mix above 50%. Execution risk on large contracts remains present, and any delays in customer deployments could compress near-term guidance.

The research report from Malacca Securities was published on 15 September 2026 as Wall Street entered its FOMC meeting and the local bourse closed for a holiday. Full details are available on M+ Online at https://mplusonline.com/research-report/detail/1431.

Key Takeaways

• RM1.8bn order book provides 2.4x FY25 revenue visibility, with management targeting RM2.0bn by year-end
• Data centre-related contracts now exceed 50% of outstanding work, insulating GREATEC from AI slowdown rhetoric while capturing infrastructure buildout demand
• Malacca Securities favours GREATEC for its order backlog visibility and exposure to secular data centre infrastructure growth across Asia-Pacific
• Factory automation margins typically improve as customers scale deployments; larger data centre clients often pay pricing premiums for reliability and customisation
• Execution risk remains on large-scale contracts; delays in customer buildout timelines could compress near-term guidance

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?