CHIN WELL HOLDINGS BERHAD 2012 Annual Report
The year under review began positively, as the landmark ruling by the European Union (EU) validated Chin Well’s position as one of the eight companies regarded as a genuine fastener manufacturer and exporter in Malaysia. The Group’s fastener exports to the EU were therefore exempted from tariffs of up to 85%. Undoubtedly, this resulted in the Group enjoying tremendous leverage in the sector.
The first half of FY2012 still witnessed pockets of growth in selected EU countries, such as Germany and Netherlands where the public sector still implemented housing and infrastructure projects. Nonetheless, the general global sentiment turned cautious in the second half of the year, on account of the prolonged EU crisis. The trend of sales orders tended to be for smaller quantities with urgent delivery deadlines, indicating that the fasteners were primarily for maintenance and replacement, rather than new expansion.
In short, the operating environment in FY2012 proved to be quite challenging. Against this backdrop, Chin Well maintained group revenues of RM501.6 million in FY2012. Local market sales were largely maintained at RM110.0 million in FY2012. On the other hand, overseas markets constituted the bulk of revenue – totalling RM391.0 million or 78.0% of group revenue. The overall uptrend in fastener demand increased utilisation of capacity in our manufacturing facilities, which resulted in economies of scale. The Group was able to record group profits before tax of RM70.5 million in FY2012, compared to RM51.1 million previously. Chin Well ended the year with RM47.6 million in group net profits, marking a 34.1% rise from RM35.5 million the year before.
Future Strategy
We target to supply our fasteners to more Do-It-Yourself customers. We believe that our prior experience in serving this niche market through our Vietnam operations provides us the necessary experience and capability to broaden our clientele in this sector going forward.
