EMS companies face more downside from prolonged production halt

KUALA LUMPUR: Electronics manufacturing services companies (EMS) are likely to see further earnings declines following the extension of the government's movement control order, which has halted production at their facilities.

According to Affin Hwang Capital research, a 28-day factory closure would negatively impact the earnings of EMS players under its coverage as they would continue to incur fixed costs such as rental and staff costs.