Highlights

• 9M26 net profit of S$15.9m forms 79.6% of our full-year forecast, in line with expectations after allowing for quarterly seasonality.
   
• Revenue of S$231.8m forms 73.4% of our July forecast, slightly below expectations. Competition continues to weigh on existing customer orders.
   
• Maintain HOLD with a lower target price of S$0.44 (previously S$0.73), pegged to 13.6x 2027F PE (+1.5SD above historical mean).
   

Analysis

• Earnings in line; revenue slightly below expectations. Aztech Global’s (Aztech) 3Q26 revenue fell 39.8% yoy and 7.3% qoq to S$80.4m as intensifying competition reduced orders from existing customers. Net profit declined 39.8% yoy but rose 20.4% qoq to S$6.5m. 9M26 revenue of S$231.8m (down 27.3% yoy) formed 73.4% of our full-year forecast, slightly below expectations, while net profit of S$15.9m (down 40.9% yoy) formed 79.6%, in line with expectations.
   
• Margins improved qoq, but remain lower on a 9M basis. 3Q26 EBITDA rose 10.5% qoq to S$9.5m despite lower sales, lifting PBT margin to 10.2% from 8.4% in 2Q26. A tax incentive cut the effective tax rate to 20.7% from 26.0%, raising net margin to 8.1% from 6.2%, flat yoy. However, 9M26 PBT and net margins fell to 8.8% and 6.9% respectively (9M25: 10.2% and 8.4%) on higher R&D costs, lower interest income and forex losses from a stronger Chinese yuan. Increased production in Malaysia also raised the 9M26 effective tax rate to 21.7% from 17.0%.
   
• 4Q26 delivery remains key. Our forecasts imply 4Q26 revenue of S$83.8m (up 4.3% qoq) and net profit of S$4.1m (down 37.5% qoq). The high earnings fulfilment partly reflects the 3Q tax incentive and quarterly earnings seasonality, so we do not view it as a beat. Existing customer orders and NPI conversion will drive 4Q performance.