• EcoSys (Malaysia) Berhad is a Malaysia-based industrial solutions provider serving the pan-semiconductor industry, with core capabilities spanning ultra-high-purity (UHP) fabrication of precision engineering components and sub-assembly modules, and the development and delivery of proprietary abatement systems that capture, treat and neutralise harmful process gases. 
• We project core PATMI to expand at a 13.6% CAGR to reach RM11.1m, RM13.4m and RM16.4m in FY26–FY28, respectively. This growth is underpinned by (i) a larger contribution from higher-margin abatement systems, (ii) deeper penetration of India’s solar-related manufacturing base, and (iii) operating leverage as throughput increases at the Simpang Ampat factory. Secured purchase orders of RM94.3m, including RM63.4m expected for delivery in FY26 and RM30.9m in FY27 based on customer schedules, provide visibility over upcoming deliveries.
• We assign a fair value of RM0.32 per share for ECOSYS, indicating an 18.5% upside from the IPO price of RM0.27. Our valuation is derived by ascribing a target P/E multiple of 14.9x to mid-FY27 core EPS of 2.14 sen, representing a 50% discount to the peer average forward P/E of 29.7x.

Investment highlights

Higher-margin abatement provides a stronger base for earnings growth. Abatement generated RM46.0m revenue and RM13.7m gross profit in FY25, with a gross margin of 29.9% versus UHP’s 19.5%, and supplied c.93% of incremental group revenue. At those margins, each ringgit of abatement sales generates roughly 10 sen more gross profit than UHP. Overseas sales representatives, including India-based Zuvay, support customer access through commission-based order solicitation. Group commissions increased from RM0.129m in FY24 to RM3.495m in FY25, mainly for Indian sales, absorbing part of the gross-profit gain. Nevertheless, abatement’s established margin advantage positions it to contribute disproportionately to incremental gross profit as sales expand alongside UHP.

Indian manufacturing expansion provides a demonstrated growth avenue. India contributed RM38.2m, or 35.1%, of FY25 group revenue, up from RM6.3m in FY24. EcoSys secured seven new Indian abatement customers during the financial review period through the latest practicable date, with five identified major customers investing in solar-related manufacturing. Customer F, a solar-related manufacturing customer, generated RM22.2m of abatement-system revenue across India and Singapore, equivalent to 20.4% of group sales. These delivered sales provide concrete evidence of solar-manufacturing capex translating into revenue for EcoSys, complementing the strong growth in its Indian business. The planned Indian sales and service centre would bring technical coverage closer to customers, supporting equipment deployment and strengthening relationships that could lead to further installations as manufacturers expand.

Proprietary technology supports customised equipment sales and follow-on opportunities. The 2011 acquisition of abatement product lines and intellectual property established a platform subsequently developed through the 2022 launch of its ‘91 Series’ and microwave-plasma technology. Mechanical and electrical design, programming and system optimisation enable EcoSys to tailor equipment to customer processes, extending its capabilities beyond customer-specified fabrication. System deliveries increased from 99 in FY24 to 194 in FY25, enlarging the installed base that may require replacement modules and technical support. Customisation supports the core equipment offering today, while these follow-on requirements provide additional sales opportunities over the equipment lifecycle, rather than contracted recurring revenue.

Secured purchase orders provide delivery visibility into FY27. Group-wide secured purchase orders totalled RM94.3m at 25 August 2026, comprising RM63.4m scheduled for delivery within FY26 and RM30.9m in FY27. These orders establish a tangible base of customer demand and support procurement and production planning against scheduled requirements. Their undisclosed segment mix limits visibility into the associated gross profit, while customer scheduling and acceptance influence the timing of revenue recognition. Timely fulfilment and subsequent collection are therefore central to translating the order pool into earnings and releasing working capital committed to deliveries.

Targeted process investment supports throughput at Simpang Ampat. The relocation addressed the former factory’s space constraint, shifting the operational focus towards component availability and individual production processes. RM17.0m of IPO proceeds will fund abatement components and modules, aiming to shorten procurement and delivery lead times by up to four weeks. Separately, the RM2.1m UHP equipment programme includes chemical cleaning and surface treatment to bring outsourced processes in-house. Stock buffers should reduce procurement waits, while in-house processing reduces dependence on external suppliers and provides greater scheduling control. Together, these investments support higher throughput across both businesses from an already operational facility, with scope for better fixed-cost absorption as production scales.