How long can EG 8907 EG INDUSTRIES BERHAD' amazing run last?

 How long can  EG 8907 EG INDUSTRIES BERHAD' amazing run last?



Electronic manufacturing services player EG Industries Bhd is having a good run.


The counter rose 13.6% to close at RM1.34 on July 5 on active trade.


More impressively, EG Industries had surged 162.8% in the past year.


It touched a 52-week high of RM1.46 in March this year, skyrocketing from a low of 44 sen.


Share price is not the only impressive record for EG Industries.


It recorded an 88.7% jump in net profit to RM10.6 million in 3QFY2023 from RM5.6 million a year ago.


This was onthe back of higher sales which was achieved despite forex losses and a higher interest rate in the market.


Quarterly revenue rose 14.5% to RM350.5 million from RM306 million in 3QFY2022, mainly due to higher sales for consumer electronic products, 5G wireless access and photonics modular related products.


For the nine months just ended, EG Industries’ net profit rose 86% to RM28.8 million from RM15.5 million a year ago while revenue grew 28.3% to RM1.1 billion from RM861.5 million.


The group remains optimistic for 2023 and 2024 as it moves its upstream beyond the electronics industry.


It also anticipate demand for 5G wireless and photonic modular related products to remain robust.


This was following the letter of intent signed last year by EG Industries with US-based Cambridge Industries Group allowing it to produce advanced high-speed optical signal transmitter and receiver (optical modules) for 5G wireless network.


Its new Batu Kawan, Penang plant is expected to commence by early 2024, which will boost its production capacity, complementing the group’s existing facilities in Sungai Petani, Kedah.


The company also tied up with Yamaha Motor Co Ltd to set up 5G automated intelligent surface mount technology (SMT) production lines for its upcoming smart lights-out manufacturing plant in Batu Kawan.


EG Industries is expected to invest up to RM80 million in phases over two years for the implementation and commissioning of the lines.


Yamaha has set up line automation for lights-out manufacturing in its manufacturing plants in Japan as well as other renowned manufacturers in Southeast Asia.


The lights-out method involves a complete networked environment that digitises material flow for autonomous manufacturing using 5G connectivity modules.


There is certainly a lot going for EG Industries given its capacity expansion to cater to growing demand.


Many investors are hoping the counter could surpass its year high but one has to expected some profit taking activities in the short term.
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