{"id":39686,"date":"2021-11-03T15:21:42","date_gmt":"2021-11-03T07:21:42","guid":{"rendered":"https:\/\/investpenang.gov.my\/pie-industrial-set-to-hit-rm1b-revenue-this-year-eyes-more-medium-to-high-volume-jobs\/"},"modified":"2025-11-28T14:50:22","modified_gmt":"2025-11-28T06:50:22","slug":"pie-industrial-set-to-hit-rm1b-revenue-this-year-eyes-more-medium-to-high-volume-jobs","status":"publish","type":"post","link":"https:\/\/investpenang.gov.my\/zh-hans\/pie-industrial-set-to-hit-rm1b-revenue-this-year-eyes-more-medium-to-high-volume-jobs\/","title":{"rendered":"PIE Industrial Set to Hit RM1b Revenue This Year, Eyes More Medium to High-volume Jobs"},"content":{"rendered":"

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PIE Industrial Set to Hit RM1b Revenue This Year, Eyes More Medium to High-volume Jobs<\/h1>\n

[\/vc_column_text][vc_separator type=”normal” el_class=”red-separator” color=”#ee4023″ transparency=”1″ thickness=”2″ up=”15″ down=”15″][vc_column_text css=”” el_class=”white-text”]<\/p>\n

2 November 2021<\/p>\n

[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”grid” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern” css=”.vc_custom_1703764846254{background-color: #f3f5f8 !important;}” z_index=””][vc_column el_class=”fade-in animate”][vc_empty_space height=”120px” el_class=”height-x120″][vc_row_inner row_type=”row” type=”grid” text_align=”left” css_animation=””][vc_column_inner][vc_single_image image=”29906″ img_size=”full” qode_css_animation=”” el_class=”single-featured-image”][\/vc_column_inner][\/vc_row_inner][vc_empty_space height=”60px” el_class=”height-x60″][vc_row_inner row_type=”row” type=”grid” text_align=”left” css_animation=”” el_class=”content-row”][vc_column_inner][vc_column_text]Nov 2 – Electronic manufacturing services (EMS) company PIE Industrial Bhd is on track to hit a new milestone of RM1 billion in revenue this year, supported by strong contract flows, including those from customers of Foxconn Technology Group.<\/p>\n

\u201cRM1 billion is an important milestone for us. Once hit, it will be much easier to continue with this momentum. I believe we can attract more customers with our reputation, capability and capacity,\u201d PIE\u2019s managing director Alvin Mui Chung Meng tells The Edge in an interview.<\/p>\n

He reveals that the target revenue for next year is in fact substantially higher at RM1.3 billion, with demand supported by a customer transferred from Taiwan\u2019s Foxconn, the world\u2019s largest EMS firm.<\/p>\n

PIE is 51.42%-owned by Taiwan\u2019s Pan-International Industrial Corp, which in turn is 27.33%-held by Foxconn, more formally known as Hon Hai Precision Industry Co Ltd.<\/p>\n

\u201cIn 2019, manufacturers were moving out from China due to the trade war between the US and China. Foxconn asked us to take over some businesses they were doing in China. We had expected the commencement of production in early 2020. [Unfortunately], a lockdown began in March 2020 and the customer had to leave [Malaysia] and the whole programme was suspended until August last year, (when) the customer gave us conditional approval to proceed with production. We were lucky with having this new customer.\u201d<\/p>\n

Mui observes that revenue was higher despite the Movement Control Order (MCO) and that this year, \u201cwe should be able to hit RM1 billion with the new customer\u201d.<\/p>\n

The additional business was reflected in its results last year as PIE recorded its best-ever revenue of RM686.36 million, from RM659.34 million in 2019, while net profit grew 24.7% to RM45.6 million from RM36.56 million despite a dismal first half.<\/p>\n

For the first half of 2021, PIE posted a net profit of RM24.32 million against a net loss of RM2.57 million in the previous corresponding period, as revenue more than doubled to RM498.55 million from RM212.06 million previously.<\/p>\n

Mui points out that demand for industrial products is promising and that Malaysia continues to be a favourite location for manufacturing and receives a lot of business enquiries.<\/p>\n

Although its previous focus was on low-volume jobs for original equipment manufacturer (OEM) customers, PIE is now looking to clinch more medium to high-volume job contracts to bump up sales revenue.<\/p>\n

While margins are typically higher for low-volume jobs, he assures that net margin levels of 5% to 6% will not be compromised. \u201cAt the same time, we need to depend more on automation, especially for high-volume products,\u201d he says.<\/p>\n

One of PIE\u2019s strengths is its vertical integration capabilities in a wide range of components including printed circuit board assembly, injection moulding, lens, cable and wire, metal stamping and box assembly.<\/p>\n

\u201cWe are able to produce different electronic products according to the design by our customers. It is not difficult to be an EMS company, but you must have something special. At PIE, many processes are produced by ourselves, so we don\u2019t need to buy from third parties. For example, we have the plastic injection division to produce different plastic parts,\u201d Mui explains.<\/p>\n

The EMS segment contributes more than 80% to its top line, while the remainder is derived from the manufacture of wires and cables for various industrial applications, as well as wire harness and cable assembly in Thailand.<\/p>\n

Customers include those in the telco, household products, computer and peripherals, industrial and medical segments. In total, PIE has about 50 customers, with five to six key ones accounting for 70% of sales revenue.<\/p>\n

\u201cThe market is very big for us as almost everything uses electronic components. We don\u2019t want to limit ourselves to just one segment of the industry,\u201d Mui emphasises.<\/p>\n

Already operating four plants in Penang and one in Thailand, PIE acquired another plant in Penang in April as part of its expansion plan. The cost of RM18 million is part of its capital expenditure allocation of RM150 million for 2021 and 2022.<\/p>\n

The new plant, with a built-up of 150,000 sq ft, is expected to be operational in the second half of next year.<\/p>\n

Plans to undertake wire harness activity for EVs<\/h3>\n

Asked if PIE has plans to venture into the electric vehicle (EV) space, Mui says he hopes it will be able to tap into this segment as Foxconn is involved in wire harness jobs for EVs. \u201cAs EV is the game changer, if Foxconn becomes the main player, we definitely have a good chance to undertake wire harness activity for EVs.\u201d<\/p>\n

Foxconn last week unveiled its first three EV prototypes in a bid to diversify from its main role of building consumer electronics for Apple Inc and other technology firms.<\/p>\n

Having Foxconn as an indirect substantial shareholder also has some advantages for PIE in terms of raw material purchases.<\/p>\n

\u201cFoxconn is not involved in our daily operations. But we can approach them to get the necessary support and help. Being the world\u2019s biggest EMS company, Foxconn has very strong purchasing power. We can get the same contract price if we use the same components as them,\u201d says Mui of Foxconn.<\/p>\n

PIE\u2019s main raw materials are copper, PVC, resin and integrated circuits.<\/p>\n

Apart from that, he says the cable division adjusts selling prices every month based on the average price of copper.<\/p>\n

\u201cThat will not affect our business. In fact, when the price of copper increases, it will benefit us as customers will load more orders to lock in the price first.\u201d<\/p>\n

Mui describes the labour shortage as more pressing than the chip shortage or rising raw material prices. As there has been no approval for the intake of foreign labour in the past two years, its foreign labour workforce has reduced considerably to 50% from 80%. PIE\u2019s net cash position has built up over the years to RM20.5 million as at end-June.<\/p>\n

Kenanga Research has a \u201cbuy\u201d call on the counter with a target price of RM4.15, representing a potential 14.3% upside from its closing price of RM3.63 last Friday. Year to date, the stock is up 50%.<\/p>\n

Source: Edge Weekly<\/a>[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][vc_empty_space height=”120px” el_class=”height-x120″][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

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