PETALING JAYA: Notion VTEC Bhd
’s sales outlook has turned tepid, with key earnings contributors expected to be adversely affected by the imposition of reciprocal tariffs by the United States.
Notion’s key earnings contributors – electrical and electronics, hard disc drive (HDD) and automotive segments – account for 38.9%, 27% and 23.9% of sales, respectively, said Hong Leong Investment Bank Research.
Consumer electronics demand is expected to weaken following the imposition of reciprocal tariffs, it added.
Notion, which generates the majority of its electronics manufacturing services (EMS) revenue from a single anchor customer, is unlikely to be insulated from the broader slowdown.
This client remains central to Notion’s growth trajectory, with a supply chain concentrated in South-East Asia and China.
Its good is produced as a premium product that is particularly susceptible to price sensitivity and demand disruptions under the new tariff regime.
Notion has expressed optimism about its motor casing venture for this customer, projecting a 25% to 30% increase in EMS sales from the initiative.
The introduction of reciprocal tariffs by the White House, however, could dampen the growth prospects of this new venture.
Slower order flows are also anticipated from major HDD manufacturers and demand from enterprise customers and hyperscalers could soften.
As the United States grapples with tariff-related economic volatility and rising recessionary concerns, enterprise information technology investments are likely to face near-term constraints.
