PublicInvest maintains ‘outperform’ on Greatech

Greatech Technology Bhd is unlikely to face problem collecting payments from Lordstown Motors Corp despite the latter’s announcement it would need to raise fresh funds to commence full commercial production of its Endurance model.

Public Investment Bank Bhd (PublicInvest) said Greatech had managed to collect an additional RM80 million from the United States electric truck start-up since the initial RM80 million it received in March.

“The management has also reassured that Lordstown has been a good paymaster, making timely payments,” said analyst Chua Siu Li in a research report.

Lordstown had previously slashed its production guidance for this year by more than half to 1,000 units, saying it needed to raise fresh funds to cover the increase in operating costs before it could reinstate its earlier production plans of 2,200 units.

“Lordstown’s current cash level of US$587 million may not be sufficient to kick start the full commercial production of its Endurance model,” she said.

PublicInvest said Greatech had secured orders from Lorsdtown to supply two battery pack assembly lines with a total contract value of about RM250 million.

“It has collected RM160 million, with the remaining RM90 million to be collected in August and October.”

Meanwhile, Greatech will likely benefit from First Solar Inc’s expansion plan of a new solar panel plant in Ohio.

First Solar is an American manufacturer of solar panels and a provider of utility-scale photovoltaic power plants and supporting services.

PublicInvest has maintained an “outperform” call on Greatech with an unchanged target price of RM6.80 per share.