This article first appeared in The Edge Malaysia Weekly on October 31, 2022 - November 6, 2022
Last Tuesday, premium cookware manufacturer Ni Hsin Group Bhd, which had diversified into the food and beverage (F&B) business last year, announced that it was making a further business diversification into the electric vehicle (EV) business.
Its wholly-owned unit Ni Hsin EV Tech Sdn Bhd will commence local assembly of two-wheel EV bikes next month and launch them in the local market.
It is worth noting that Ni Hsin had in March 2021 diversified into the F&B business by launching the BlackBixon Coffee, a bioenergy beverage in capsules. However, the division is still in its infancy stage, registering revenue of merely RM400,000 in the financial year ended Dec 31, 2021 (FY2021).
But the fact remains that the F&B segment — classified under other division, which made a loss of RM4.8 million last year — had partly dragged Ni Hsin into a net loss of RM6.4 million in FY2021, as compared to the net profit of RM1.9 million in FY2020.
Note that Ni Hsin has made a few attempts to go into the oil and gas sector over the years, but has been unsuccessful.
How soon will Ni Hsin’s latest venture yield positive results for the group, at a time when it is still awaiting maiden profit contribution from its F&B division?
Coincidentally, Ta Win Holdings Bhd on Thursday announced that it has obtained government approval to operate an electron beam plant in Alor Gajah, Melaka. The new plant, which is expected to play a role in the EV segment, will fully commence commercial production by early next year.
Ta Win said it plans to strengthen its presence in the EV industry by producing heat-resistant, durable and long-lasting cross-linked wires and cables and simultaneously procure and secure more major automotive customers.
Besides Ni Hsin and Ta Win Holdings Bhd, there were other companies that announced ventures into the EV market, bringing to mind the many public-listed companies (PLCs) that jumped on the glove and vaccine bandwagon during the pandemic, although not many could claim to be successful in their business diversification.
Will the same storyline play out with the recent spate of EV ventures?
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