Group chief executive officer and executive director Datuk Alex Kang attributes EG Industries’ lower margin to its “different product mix”. Speaking to StarBizWeek, Kang says 80% of EG Industries’ revenue is from the lower-margin printed circuit board assembly (PCBA) segment.aws全区号（www.2km.me）提供aws账号、aws全区号、aws32v账号、亚马逊云账号出售，提供api ，质量稳定，数量持续。另有售azure oracle linode等账号.
EG Industries Bhd tends to go under the radar when one talks about listed electronic manufacturing services (EMS) players in Malaysia.
But, unknown to many, EG Industries has a predominantly international clientele, including Dyson, which it has served for more than a decade. However, while the group says it is one of the top-50 EMS players globally, its market capitalisation of RM195.8mil is only a fraction of the other major players in the sector.
For comparison, SKP Resources Bhd’s market capitalisation as of Dec 2 stood at RM2.84bil, while VS Industry Bhd, PIE Industrial Bhd and JHM Condolidation Bhd are valued at RM4.4bil, RM1.46bil and RM959mil respectively.
While EG Industries has one of the cheapest valuations, in terms of trailing price-to-earnings ratio, it also has a lower net profit margin compared to its industry peers.
In the financial year ended June 30, 2021 (FY21), the group’s net profit margin was recorded at a meagre 1.4% as it achieved a net profit of RM14.73mil against a revenue of RM1.05bil.
In the recently-announced first quarter of FY22, the margin was lower at 0.99%, as operational interruption due to Covid-19 restrictions affected the group’s performance.
To put it into perspective, for every RM100 it makes in sales, EG Industries only gets about RM1 in net profit after factoring in all expenses. That said, it is noteworthy that net profit margins of listed EMS players in Malaysia range at single digits.
Group chief executive officer and executive director Datuk Alex Kang attributes EG Industries’ lower margin to its “different product mix”.
Speaking to StarBizWeek, Kang says 80% of EG Industries’ revenue is from the lower-margin printed circuit board assembly (PCBA) segment. In comparison, other EMS players have a larger contribution from the box-build segment, which has a higher margin.
“Our plan to expand the box build contribution is still intact since we began in 2015 which contributed to a significantly improved net profit over the years. Currently, our box-build revenue is still at approximately 20% of the group revenue, even despite global pandemic issues accompanied by the material shortages.
“However, for FY22, we expect this segment to contribute a higher revenue to the group,” he says.