PETALING JAYA : Notion VTec Bhd’s sales outlook has weakened, with its key earnings segments expected to face headwinds following the introduction of reciprocal tariffs by the United States.
According to Hong Leong Investment Bank Research, Notion’s main revenue contributors — electrical and electronics, hard disk drive (HDD), and automotive — account for 38.9%, 27%, and 23.9% of total sales, respectively. The imposition of tariffs is expected to dampen consumer electronics demand, further impacting the group’s performance.
Notion, which derives the bulk of its electronics manufacturing services (EMS) revenue from a single anchor customer, is unlikely to be shielded from the broader slowdown. This customer remains critical to Notion’s growth strategy, with its supply chain heavily reliant on operations in South-East Asia and China.
The group’s premium product offerings are particularly vulnerable to pricing pressures and potential demand disruptions under the new tariff environment.
Despite these challenges, Notion remains optimistic about its motor casing venture for its key customer, projecting a 25% to 30% increase in EMS sales from this initiative. Nevertheless, the introduction of reciprocal tariffs could dampen growth prospects for the new venture.
Hong Leong Investment Bank Research also warned of slower order flows from major HDD manufacturers, with enterprise demand and spending by hyperscale data centre customers likely to soften.
As the United States contends with tariff-induced economic volatility and rising recessionary risks, near-term constraints on enterprise information technology investments are anticipated.
–The Star
