This article first appeared in The Edge Malaysia Weekly on October 6, 2025 - October 12, 2025

GE-Shen Corp Bhd (KL:GESHEN) is working to restore investor confidence and advance its transformation strategy after the sudden resignation of its executive chairman earlier this year rattled markets.

Under new management, the precision engineering and manufacturing services firm remains committed to expanding its electronic manufacturing services (EMS) and precision engineering capabilities, with aspirations to become a Tier-1 EMS player within the next 10 years.

On March 24, shares in Ge-Shen tumbled as much as 14% intra-day sparked by the abrupt departure of executive chairman and largest shareholder Datuk Keh Chuan Seng, who stepped down after just 21 months at the helm. The stock closed at a one-year low of RM4.40 that day — equivalent to RM1.47 after adjusting for a two-for-one bonus issue.

Ge-Shen was not the only stock affected by the news. Several companies associated with Keh also saw selling pressure, including Tex Cycle Technology (M) Bhd (KL:TEXCYCL), K Seng Seng Corp Bhd (KL:KSSC), ES Sunlogy Bhd (KL:SUNLOGY) and Agricore CS Holdings Bhd (KL:AGRICOR).

While the affected companies moved swiftly to clarify that Keh’s exit was due to personal reasons and did not affect their operations, Ge-Shen’s stock remained under pressure. It declined further to RM1.35 on April 9 — its lowest level since Jan 16 this year. The share price has since staged a 19% rebound to close at RM1.60 last Thursday.

CEO Dr Adrian Foong Hong Nian, who assumed the role in September 2024, says the group’s two largest shareholders — Keh, via Frazel Group Sdn Bhd, and Enrich Signature Sdn Bhd, controlled by the Chiau brothers of Chin Hin Group, namely Chiau Haw Loon and Chiau Haw Yew — remain passive investors with no involvement in day-to-day operations.

“They are substantial shareholders, but execution rests squarely with management,” Foong tells The Edge in an interview.

Notably, Frazel Group and Enrich Signature are also shareholders of Tex Cycle Technology, holding 24.06% and 12.06% respectively, as at March 25, 2025.

Operational leadership is jointly led by Foong and executive director Lee Hai Peng, who became a substantial shareholder in December 2024, and has since increased his stake to 6.48%. Lee also holds a 4.91% stake in Tex Cycle Technology as at Sept 11, 2025.

Foong highlights Ge-Shen’s plans to expand into outsourced semiconductor assembly and test (OSAT) services, in addition to EMS. “We already offer manufacturing, assembly and design services. After assembly, testing is the natural next step — that’s where we’re heading next.”

Keh, who emerged as Ge-Shen’s largest shareholder in June 2024, has since pared down his stake from 27.91% to 18.74%. Enrich Signature also reduced its shareholding from 18.31% to 10.39%.

For the financial year ended Dec 31, 2024 (FY2024), Ge-Shen’s net profit rose 40.1% year on year (y-o-y) to RM11.8 million, while revenue grew 7.3% to RM275.1 million, driven by a strategic shift to high-end consumer, commercial and industrial products, along with a focus on technologies with high margins and related to artificial intelligence (AI).

This momentum carried into 1HFY2025, with net profit surging 63.9% y-o-y to RM12.4 million and revenue rising marginally to RM150.3 million, boosted by tighter cost controls, operational efficiencies and contributions from its 40%-owned subsidiary Local Assembly Sdn Bhd. A one-off RM4.9 million gain from property sales further aided earnings.

However, trade receivables also rose 78.7% to RM54.1 million in 1HFY2025, up from RM30.3 million a year earlier. Similarly, other receivables, deposits and prepayments increased 34.2% to RM39.8 million, compared to RM29.7 million in the same period.

According to Foong, the rise in trade receivables was mainly due to the acquisition of new subsidiaries, amounting to RM2 million, while the increased other receivables were a result of the disposal of plant and machinery from a facility that ceased operations in 2QFY2025. He adds that this is not a concern for Ge-Shen, as the increases are largely one-off in nature.

Entering the second year of its business transformation, Ge-Shen aims to become an established player in the EMS industry within five years, with a longer-term goal of reaching Tier-1 EMS status in 10 years, joining the ranks of peers like Inari Amertron Bhd (KL:INARI) and NationGate Holdings Bhd (KL:NATGATE), which have market capitalisations of around RM8.9 billion and RM2.9 billion respectively.

“We’re still a smaller player, but we’re gradually closing the gap each year. We have to move in this direction … to be in the same league as Inari and NationGate. That’s our vision,” stresses Foong.

At Thursday’s closing price of RM1.60, Ge-Shen had a market cap of RM646.6 million.

To support its next phase of growth, Ge-Shen is heavily investing in talent development. The group has launched a graduate trainee programme designed to rotate fresh graduates through various departments, including design, production and procurement to develop versatile, cross-functional talent. It has also forged academic partnerships, including with Universiti Teknologi Malaysia and Universiti Sains Malaysia, to bolster its pipeline of skilled workers.

Ge-Shen currently employs about 1,380 staff, up from around 1,000 in 2024.

Last year, Ge-Shen invested nearly RM30 million in capital expenditure to expand its capacity and scale up for more complex customer projects. This included a RM23.3 million facility in Penang, as well as a RM4.17 million expansion of its plant in Hanoi, Vietnam, which specialises in plastic moulding and assembly services.

“Previously, each factory was highly specialised. For example, Polyplas Sdn Bhd in Penang focused solely on plastic injection moulding, while our 72%-owned subsidiary Kibaru Manufacturing Sdn Bhd in Kedah handled only rubber products. Now, we’re shifting to a more flexible model. Instead of each plant being 100% focused on a single material, we aim for an 80:20 mix. This way, our plants can support each other when order volumes overflow,” Foong explains.

He notes that Vietnam gives Ge-Shen strategic leverage, especially during trade tensions when customers seek alternatives to China-origin products.

“Its proximity to the US market also makes it an attractive base,” he says, adding that the Vietnam operation now contributes 10% to 15% to the group’s revenue.

Ge-Shen is taking a measured approach to growth, with plans to optimise its current manufacturing footprint before pursuing further regional expansion.

“This year, our focus is on maximising our manufacturing capabilities — driving customer acquisition, improving contract fulfilment and enhancing production efficiency. Only after that will we explore new markets,” says Foong.

Even though most Malaysian technology stocks are down year to date as US President Donald Trump’s tariffs, geopolitical tension and US chip export restrictions spark fears, Foong remains bullish on the broader prospects of the EMS industry.

“In every contract, there’s always the ‘good to have’ and ‘must have’. The ‘must-have’ services are where we want to establish ourselves ... These are core offerings. The ‘good to have’ involves customer-specific requirements, and we assess whether we can support these through investments in equipment or training,” he says.

While organic growth is the priority, Ge-Shen remains open to mergers and acquisitions that complement its supply chain, having acquired stakes in Kibaru Manufacturing, Local Assembly, Amity Research & Development Sdn Bhd and Amity Technical Services & Consultancy (M) Sdn Bhd over the past two years as part of its shift to complex, value-added EMS.

As at end-June 2025, Ge-Shen reported a cash balance of RM33.6 million against total borrowings of RM121.4 million, placing the group in a net debt position of RM87.8 million. This translates into a net gearing ratio of 0.5 times.

“We currently have two major cornerstone customers for whom we handle high-end assembly. That’s the direction we’re heading — towards more complex and value-added work,” he adds, noting that the EMS segment now accounts for about 50% of the group’s total revenue, with the rest from precision-engineered components.

Despite the push into EMS, Ge-Shen is not abandoning its legacy operations, which include metal fabrication, plastic injection moulding, rubber compression moulding, metal stamping and liquid silicone rubber moulding.

“We’re still running our existing operations. For example, we continue to manufacture medical components. It’s a stable business with good margins. Our core sectors remain industrial, medical and consumer electronics,” he says.

Foong underscores the need for more cornerstone clients — customers who contribute 30% to 40% to revenue — akin to Inari’s partnership with Broadcom or NationGate’s exclusive role with Nvidia in Southeast Asia, with a goal of securing at least one anchor client every two years.

Still, as the global tech industry continues to face uncertainty over Trump’s shifting trade policies, it remains to be seen whether the goal can be met. 

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