EG is not inherently "prone" to negative impacts from the US-China trade war; instead, it has positioned itself as a beneficiary through supply chain diversification away from China. As an exporter of finished goods to the US and Europe (key markets alongside domestic and Southeast Asia), EG benefits from lower US tariffs on Malaysian imports (typically 0-10% under WTO rules, versus 25%+ on Chinese goods). This has attracted redirected orders from Chinese clients shifting production to avoid US duties—EG serves as the exclusive worldwide manufacturing partner for Cambridge Industries Group (CIG), a Shanghai-listed firm, for 5G optical modules, and partners with leading Chinese network switch providers. Inquiries from Vietnam, Indonesia, and China have surged as these countries face higher reciprocal tariffs, with Malaysia's favorable status boosting EG's order book. For instance, in Q3 FY2025 (ended March 31, 2025), revenue hit RM300.6 million (up 1.9% YoY), with profit margins expanding to 4.2% from better mix and scale.
While the broader EMS sector relies on global components (e.g., semiconductors, where China supplies ~30% of intermediates), EG's supply chain risks appear limited—no public disclosures indicate heavy dependence on Chinese raw materials that could trigger cost spikes from retaliatory measures or export controls. Key risks flagged by analysts include general supply disruptions or forex volatility (EG earns in USD/EUR), but these are mitigated by its strong client base (e.g., ties to AI/EV leaders like potential vendors for Tesla or Nvidia ecosystems via optical tech) and expansions, such as a 45% increase in production capacity to 80,000 sqm completed in 2024. Overall, EG's earnings growth (59% CAGR over five years) and first-ever dividend in FY2024 underscore resilience, with trade tensions acting more as a tailwind than a headwind.