KUALA LUMPUR: Genetec Technology Bhd's partnership with Asia Precision Public Company Ltd will allow new opportunities for the former to expand its customer base in Thailand, particularly in the energy storage system (ESS) segment.

CGS-CIMB Research said the move is part of Genetec's customer diversification plan, which could lead the company to participate in Thailand's electric vehicle (EV) ecosystem development.

"Thailand is aggressively pushing to become the EV production hub in Southeast Asia. Thai's government established the National Electric Vehicle Policy Committee (NEVPC) in 2020 to accelerate the country's national EV roadmap," it said in a research note today.

Genetec had recently entered into a Memorandum of Understanding (MoU) with Asia Precision to collaborate and conduct a feasibility study in relation to the potential development of a factory automation facility for ESS business in Thailand.

NEVPC recently launched its roadmap, which lays out the framework for Thailand's EV development from 2021- 2035 with the aim of transforming its existing automotive supply chain from internal combusting engines towards zero-emission vehicles.

CGS-CIMB Research said NEVPC set a target of over one million EVs to be on the road by 2025 and 16 million EVs by 2035.

NEVPC also estimated Thailand to produce more than one million EVs by 2025 and 18 million EVs by 2035.

"Overall, this is an exciting opportunity for Genetec to potentially supply automation solutions for ESS going into EVs and charging infrastructure."

CGS-CIMB Research has reiterated an 'Add' call for Genetec with a target price of RM4.15, backed by higher-than-expected orderbook replenishment, a rise in institutional funds' holdings and expansion into new customers or verticals.