D&O Faces Another Tough Year

D&O Green Technologies Berhad is facing another challenging year, with analysts downgrading the stock to SELL from NEUTRAL and cutting the target price to RM0.39. The company’s near-term outlook remains bleak, as weak automotive markets in Europe and China continue to pressure demand for LED products. While electric vehicle demand in China is encouraging, fierce competition and shorter model cycles are creating pricing challenges.

D&O

In Europe, car sales remain in contraction, with industry calls for weaker climate targets potentially slowing affordable EV rollouts. Although newer products like SpicePlus 2520 and Smart RGB are expected to contribute more revenue, they are unlikely to offset overall weakness. Management is focusing on cost reduction through automation, workforce resizing, and supplier diversification, but inventory impairments are expected to persist in FY26, impacting profitability. Forecasts for FY26–28 have been revised downward, with hopes of a cleaner slate by 2027.

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