KUALA LUMPUR (July 15): Electronics manufacturing services firm EG Industries Bhd (KL:EG) has secured a deal worth US$100 million (RM407 million) from a US-based firm to manufacture and sell advanced networking switches using co-packaged optics technology.
In a bursa filing on Wednesday, the company said its unit Genetronic (Malaysia) Sdn Bhd had entered into a letter of intent with the US-based customer.
"The collaboration is expected to generate approximately US$100 million (in revenue)," said EG Industries.
The identity of the customer referred to as Company M — a global provider of open-networking solutions, specialising in high-performance ethernet switches and networking solutions for hyperscale, cloud and artificial intelligence (AI) data centre applications.
"This collaboration marks an important milestone in our long-term strategy to build capabilities in next-generation networking technologies,” said EG Industries group chief executive officer Datuk Alex Kang Pang Kiang.
“We are confident this is only the beginning and expect additional purchase orders for CPO (co-packaged optics) products to follow as customer programmes progress,” Kang added.
EG Industries expects the deal to contribute positively to the group’s earnings and net assets in the financial year ending June 30, 2027 (FY2027) and FY2028.
Looking ahead, EG Industries said it remains confident in its long-term growth prospects on rising demand for AI-driven networking infrastructure, hyperscale data centres and next-generation connectivity solutions.
On May, EG Industries secured its largest-ever contract worth RM949 million for 800G optical modules and wireless access products from its key existing client only identified as ‘Customer C’ that contributed more than one-third of EG Industries’ total revenue in FY2025.
All four analysts covering EG Industries have 'buy' calls on the stock. The average 12-month target price for the stock is RM2.47 a share with target prices ranging from RM2.10 to RM2.70, according to Bloomberg.
At the time of writing on Wednesday, EG Industries’ shares were up 10 sen or 5.65% at RM1.87 — hovering near their all-time high — giving the company a market value of RM1.77 billion.