EG INDUSTRIES BERHAD: Navigating Growth Amidst Evolving Market Dynamics in Q3 FY2025
Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial performance of EG INDUSTRIES BERHAD (EGIB), a prominent player in the Electronics Manufacturing Services (EMS) sector, as revealed in their third-quarter report for the financial year ended 31 March 2025. This report offers a fascinating glimpse into how EGIB is not only sustaining growth but also strategically positioning itself for the future, even as it navigates a complex global economic landscape. While the quarter saw a slight dip from the immediate preceding period, the overall trend for the nine-month period remains robust, signaling strong underlying fundamentals and ambitious expansion plans. Let’s break down the numbers and strategic moves that are shaping EGIB’s trajectory.
Core Performance Highlights
EGIB’s latest report showcases a mixed yet generally positive picture. The Group achieved commendable growth when compared to the corresponding period last year, demonstrating resilience and strategic effectiveness. However, a quarter-on-quarter comparison reveals some immediate challenges, primarily due to shifts in product demand.
Quarterly Performance (Q3 FY2025 vs. Q3 FY2024)
Q3 FY2025
Revenue: RM300.6 million
Profit Before Tax (PBT): RM11.2 million
Profit for the Financial Period: RM11.2 million
Basic Earnings Per Share: 2.69 sen
Q3 FY2024
Revenue: RM294.9 million
Profit Before Tax (PBT): RM10.7 million
Profit for the Financial Period: RM10.3 million
Basic Earnings Per Share: 2.22 sen
For the third quarter ended 31 March 2025, EGIB’s revenue saw a modest increase of 1.9% to RM300.6 million compared to the same quarter last year. This revenue growth translated into a 5.1% rise in Profit Before Tax (PBT) to RM11.2 million, and an 8.0% increase in net profit to RM11.2 million. The improved earnings were primarily driven by higher yields from 5G wireless access and photonics-related products, complemented by favourable foreign exchange movements. However, these gains were partially offset by increased interest expenses and depreciation, a consequence of the Group’s ongoing expansion initiatives.
Cumulative Performance (9 Months FY2025 vs. 9 Months FY2024)
9 Months FY2025
Revenue: RM982.3 million
Profit Before Tax (PBT): RM58.7 million
Profit for the Financial Period: RM58.0 million
Basic Earnings Per Share: 13.21 sen
9 Months FY2024
Revenue: RM797.3 million
Profit Before Tax (PBT): RM34.6 million
Profit for the Financial Period: RM33.5 million
Basic Earnings Per Share: 7.19 sen
Looking at the cumulative nine-month period, EGIB’s performance truly shines. Revenue surged by a substantial 23.2% to RM982.3 million, up from RM797.3 million in the corresponding period last year. Profit Before Tax (PBT) witnessed an impressive jump of 69.7% to RM58.7 million, while net profit soared by 73.0% to RM58.0 million. This significant improvement was largely attributed to a more favourable product sales mix and enhanced yields from 5G wireless access and photonics-related products.
Quarter-on-Quarter Comparison (Q3 FY2025 vs. Q2 FY2025)
| Description | Q3 FY2025 (RM’000) | Q2 FY2025 (RM’000) | Change (%) |
|---|---|---|---|
| Revenue | 300,620 | 343,112 | -12.4% |
| Profit before tax | 11,212 | 13,052 | -14.1% |
| Profit for the financial period | 11,152 | 12,584 | -12.8% |
Compared to the immediate preceding quarter (Q2 FY2025), EGIB’s revenue for Q3 FY2025 saw a 12.4% decrease, primarily due to lower demand for data storage products. Consequently, profit for the financial period also experienced a slight reduction from RM12.6 million in Q2 FY2025 to RM11.2 million in the current quarter.
Financial Health and Cash Flow
EGIB’s balance sheet remains robust. Total equity increased significantly from RM528.2 million as at 30 June 2024 to RM604.2 million as at 31 March 2025, reflecting strong retained earnings and capital reserve contributions. Net assets per ordinary share also rose from RM1.15 to RM1.30. From a cash flow perspective, the Group generated a healthy RM77.0 million from operating activities for the nine-month period, a substantial improvement from RM22.8 million in the previous corresponding period. This indicates efficient operations and strong working capital management, even as the company continues to invest heavily in its future growth.
Strategic Outlook and Future Prospects
EGIB is acutely aware of the prevailing macroeconomic headwinds, including global tariff impositions, intense market competition, currency fluctuations, and rising operating costs. However, the Group maintains a positive outlook for 2025, buoyed by anticipated strong demand in high-growth segments.
The company foresees robust demand for Advanced High-Speed Optical Signal Transmitters and Receivers (Optical Modules), AI modules, and network switches. This optimistic projection is underpinned by the continuous expansion of wireless networking technology and the increasing global need for hyper-scale data centers. EGIB is actively capitalizing on these trends through several strategic initiatives:
- New Customer Agreement: On 16 May 2025, EGIB secured a Master Purchase Agreement with a new U.S.-based customer to supply backup batteries for network routers, AI-robotic devices, network switches, and other consumer network-related equipment. This agreement will facilitate exports to both the U.S. and international markets, with production slated for the new Smart Factory 4.0 in Batu Kawan, Penang, which is expected to commence operations this year.
- Smart Warehousing: The Group has operationalized Public Bonded Smart Warehouses in Sungai Petani, Kedah, earlier in 2025. These facilities are designed to support manufacturing activities and introduce a new revenue stream for the Group.
- Expansion into Thailand: EGIB’s strategic investment in N.D. Rubber Public Co., Ltd (NDR) in Thailand, acquiring a 24.08% stake, is a pivotal move. This collaboration aims to establish an EV 5G Photonics Module testing center in Thailand, providing direct entry into the global Electric Vehicle (EV) supply chain through NDR’s established Approved Vendor Lists (AVL) with major automotive and EV manufacturers.
- New Subsidiary: The formation of Aitronic Sdn. Bhd., a 51% subsidiary, through a collaboration with an overseas manufacturer, will focus on the manufacturing and wholesale of hardware accessories, further diversifying the Group’s offerings.
These strategic developments are poised to strengthen EGIB’s market presence, enhance its capabilities in high-demand sectors, and drive sustainable long-term profitability.
Summary and Outlook
EG INDUSTRIES BERHAD’s third-quarter results for FY2025 demonstrate a company that is not just adapting to market conditions but actively shaping its future. While the quarter-on-quarter performance saw a slight moderation, the overall nine-month trajectory shows significant growth in revenue and profitability, driven by strategic focus on high-yield products like 5G wireless access and photonics-related solutions. The Group’s financial health remains solid, with a strong increase in equity and healthy cash generation from operations.
Looking ahead, EGIB’s strategic investments in advanced manufacturing facilities, expansion into new markets like Thailand’s EV and 5G photonics sectors, and new customer agreements underscore a clear vision for accelerated and sustainable growth. The management’s proactive approach in addressing market challenges while seizing emerging opportunities positions EGIB well for the coming years.
Key points to consider from this report include:
- Consistent growth in core EMS business, particularly in 5G wireless access and photonics products.
- Significant year-on-year improvement in both top and bottom lines for the cumulative nine-month period.
- Proactive strategic investments in new technologies (AI, EV, 5G) and geographical markets (Thailand).
- Strong operational cash flow generation, supporting ongoing expansion.
- Awareness and mitigation strategies for macroeconomic challenges like tariffs and currency fluctuations.
As a seasoned observer of the Malaysian market, I believe EGIB’s strategic pivot towards high-growth, high-value segments like 5G photonics and EV components is a sound move. The investment in advanced manufacturing capabilities and diversified revenue streams, such as the new Smart Factory 4.0 and bonded warehouses, indicates a long-term vision that extends beyond immediate quarterly fluctuations. While the dip in the latest quarter highlights the cyclical nature of certain product demands, the overall trend and forward-looking initiatives paint a positive picture for the company’s future.
What are your thoughts on EGIB’s latest performance and strategic direction? Do you think their investments in 5G and EV markets will provide the sustained growth momentum they are anticipating? Share your insights in the comments below!
For more in-depth analyses of Malaysian companies, check out our other articles on [Link to Related Article 1] and [Link to Related Article 2].
