KUALA LUMPUR: ECA Integrated Solution Bhd plans to diversify its products as it expects the slowdown in global semiconductor to persist until the first half of 2024. 

Public Investment Bank Bhd (PublicInvest) said ECA had ended its financial year 2023 (FY23) with core earnings of RM10.8 million, led by stronger contributions from both integrated production systems and standalone automated equipment segments. 

Despite the stronger finish, the results were below PublicInvest's full-year expectations, making up only 74 per cent. 

"We attribute the weaker-than-expected results due to slower spending by the end customers especially in the semiconductor and automotive segments in the final quarter as well as higher selling and administrative expenses. 

"Consequently, we cut our FY24-25 earnings forecasts by 29 per cent-35 per cent," it said in a note. 

PublicInvest said ECA had expected the current slowdown in global semiconductor to persist until the first half of 2024 before seeing a recovery in growth. 

"To mitigate the risk exposure, the group aims to diversify through the introduction of innovative products, while concurrently emphasising the improvement of operational efficiency and the expansion of market size."

Meanwhile, ECA has fully utilised the RM25.5 million proceeds raised from its listing exercise.

Majority of the proceeds were earmarked for acquisition of new advanced machinery to bolster its production capabilities as well as for working capital purposes in order to undertake larger customer orders.

PublicInvest maintained its "Outperform" call on the company with a lower target price of 73 sen.