Feytech Presents A Solid Base-Case Fundamentals Anchored by Cash, With Structural Upside From JV-Driven Capacity Expansion

Feytech Holdings Berhad (KLSE: FEYTECH) remains one of the few automotive component manufacturers on Bursa Malaysia that continues to demonstrate structurally sound base-case fundamentals while entering a new phase of growth upside through strategic joint ventures and capacity expansion.

Even amid normalisation in Malaysia’s Total Industry Volume after several years of post-pandemic recovery, the Group has remained consistently profitable, underpinned by its entrenched position in the automotive seat and cover segments and long-standing relationships with key original equipment manufacturers (“OEMs”).

For the nine months ended 30 September 2025, FEYTECH recorded revenue of RM93.55 million and profit after tax of RM7.60 million, delivering positive earnings despite a lower industry order environment. Gross profit margin remained resilient at approximately 23.0%, reflecting effective cost control and stable manufacturing utilisation across both automotive seat and cover operations.

On a quarterly basis, Q3 FY2025 revenue stood at RM32.20 million with profit after tax of RM2.50 million, while margins remained firm at 24.4%. These numbers illustrate a defensive earnings floor that continues to generate cash even in a moderating demand cycle.

From a balance-sheet standpoint, FEYTECH’s financial strength is a key differentiator. As at 30 September 2025, the Group held RM169.88 million in cash and short-term deposits against total borrowings of RM60.95 million, leaving it in a clear net cash position.

Total equity stood at RM251.85 million with net assets per share of RM0.30. Operating cash flow generation remained robust, with RM39.52 million generated from operations year-to-date, reinforcing the quality of earnings and providing ample internally generated funding for expansion without balance-sheet strain.

The immediate upside catalyst comes from the formalisation and execution of the Group’s joint venture with China-based Wuhu Ruitai Auto Parts Co. Ltd via FTRT Autoparts Sdn. Bhd., in which FEYTECH will ultimately hold 51% equity.

The FTRT plant in Subang Jaya, spanning approximately 81,980 square feet, is designed to integrate design, manufacturing and assembly of automotive seat components and parts, specifically for Chery, Jetour and future OEM programmes.

With an initial investment of approximately RM10 million, the facility is projected to reach an annual production capacity of 36,000 vehicle sets at full scale, with regional export potential embedded within the customer pipeline.

Strategically, this JV structurally upgrades FEYTECH from a purely domestic manufacturer into a higher-value regional supplier with direct entry into fast-growing Chinese OEM ecosystems expanding in Southeast Asia. The localisation of seat production also aligns strongly with Malaysia’s upcoming New Customised Mechanism (“NCM”) incentive framework, which explicitly rewards OEMs that commit to local vendor depth.

Automotive seats are classified as a core localisation component under the framework, placing FEYTECH and FTRT in a favourable competitive position as localisation scoring becomes a key OEM procurement factor.

Operationally, early-stage cost absorption linked to the Subang plant establishment was already reflected in Q3 FY2025, where profits moderated slightly due to higher administrative and factory-related expenses. Importantly, these costs represent forward-looking capacity investments rather than structural margin erosion. As production ramps up over FY2026 and scale efficiencies kick in, operating leverage is expected to improve meaningfully.

Beyond the Chery-Jetour platform, FEYTECH is simultaneously deepening its technology stack through its collaboration with DAS Corp Korea for the Hyundai Staria project. This technical partnership enhances FEYTECH’s engineering capability for higher-complexity seat structures, creating a longer-term pathway into premium and higher-margin vehicle platforms.

From a base-case perspective, FEYTECH already demonstrates defensiveness through three pillars: recurring OEM orders, strong cash generation, and conservative financial leverage. The FTRT JV layer now adds a second earnings growth curve driven by capacity monetisation, localisation demand, and regional export optionality.

With the Subang plant designed to support multiple OEM programmes, volume dependency on a single brand is structurally reduced over time.

In summary, FEYTECH today represents a rare dual-profile opportunity in the automotive manufacturing space. Its base-case is already supported by profitable operations, strong margins and net cash balance-sheet strength, while its forward upside is driven by JV-enabled capacity scaling, Chinese OEM localisation, and technology transfer from international partners.

With structural demand shifting toward Asia-based EV-oriented and Chinese OEM ecosystems, FEYTECH’s platform positioning appears increasingly aligned with the next phase of Malaysia’s automotive supply-chain evolution.