EMS outlook seen bright

TheStar Tue, Apr 02, 2019 10:32am - 4 years View Original


Noting that sector earnings in 2019 were expected to be sub-par at 2% growth, plagued by weaker orders from a major customer for both VS Industry and SKP Resources Bhd, the research house said all three companies were likely to see earnings recovery in 2020 with a sector growth of 32%.

Noting that sector earnings in 2019 were expected to be sub-par at 2% growth, plagued by weaker orders from a major customer for both VS Industry and SKP Resources Bhd, the research house said all three companies were likely to see earnings recovery in 2020 with a sector growth of 32%.

PETALING JAYA: The country’s electronics manufacturing services (EMS) sector is poised to enjoy growth from continuous job wins, given its state-of-the-art capabilities as well as additional job flows diverted from the US-China trade conflict.

UOB Kay Hian Research (UOBKH) said the sector was a “bright spot”, with all three EMS players it covers embarking on an aggressive expansionary drive which will result in a sector net profit compounded annual growth rate (CAGR) of 15% in financial years 2018-2021 (FY18-21).

   

In a note, the research house said ATA IMS Bhd has direct exposure to its European customer’s aggressive growth, while VS Industry Bhd was the prime beneficiary of the trade diversion.

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