KUALA LUMPUR (Nov 23): Chin Well Holdings Bhd recorded growth of 8.6% in its net profit for the first quarter ended Sept 30, 2017 (1QFY18) to RM13.97 million from RM12.86 million a year ago, thanks to higher revenue.

Earnings per share (EPS) increased to 4.67 sen in 1QFY18 from 4.29 sen in 1QFY17.

Chin Well said in its bourse filing that quarterly revenue rose 21.7% to RM137.94 million from RM113.31 million in 1QFY17, attributed to the export of fastener products to European countries in the period under review.

“[The Fastener Products [division] posted revenue of RM111.27 million and profit before tax of RM16.14 million respectively in the reporting quarter. The revenue and its profit before tax improved by 14.9% and 18.6% respectively in the current reporting period compared with the preceding year corresponding period,” Chin Well said.

“Higher export sales to European countries contributed to higher revenue and improved the results of the division in the current quarter. In addition, the profit margin of the division was sustained with mark up in the average selling price of the fasteners products following the hike in its raw material cost,” it added.

Moving forward, Chin Well said the market outlook for the group is expected to remain challenging in the remaining quarters, citing the trend of the market demand and the volatility of raw material prices as main factors that may affect its performance.

The group explained the unexpected market movement and rapid changes in the raw material cost will affect its production volume, product cost and bottomline.

“In order to cushion the stress from the safeguard duty imposed by the Malaysian government towards the end of the financial year ended June 30, 2017 on wire rods imported from China, the group had sourced its raw material from other alternative countries such as the Middle East and Vietnam which are duty exempted and without compromising the quality of our products,” it said.

“Application to the authorities for the exemption of the duty is in the progress with the hope of obtaining the approval in the next few
months,” it added.

Further, Chin Well said it will explore other new business ventures which will potentially benefit its growth in addition to the existing core business, from time to time.

“Barring any unforeseen circumstances, the group anticipates satisfactory performance in the current financial year,” it said.

Chin Well closed unchanged at RM1.75, valuing the group at RM524.05 million.