KUALA LUMPUR (June 1): New Hoong Fatt Holdings Bhd (NHF) is keeping its double-digit growth in net profit and revenue this year, driven by its overseas businesses.

The international contribution is expected to grow to 70% of the group's revenue by 2021, from 52% currently, its managing director Chin Jit Sin said. It now exports to more than 50 countries.

The automotive parts maker saw net profit jump 34.6% to RM7.37 million in the first quarter ended March 31, 2017 (1QFY17), from RM5.48 million a year ago, partly due to favourable impact from foreign exchange (forex) rate. Revenue also rose 14.3% to RM62.47 million, from RM54.64 million in 1QFY16, on higher demand in both local and overseas markets.

Chin said the group had recently acquired a 6.1-acre piece of land in West Java, Indonesia, to develop a manufacturing plant there. 

“That [Indonesia] is where the growth market is,” he told reporters, after the group’s annual general meeting here today.

"While Indonesia is still one of NHF’s smaller markets, it is the group’s fastest growing market in Asean, contributing 14.8% to the group's revenue last year," he added. 

Chin said in the initial stage, the Indonesian plant will only produce car bumpers. This means the market will still import many other auto parts from Malaysia. 

“From our experience in Indonesia, the whole process will take a longer time,” he said, adding that the land will only be officially transferred to NHF by end-July.

Chin also said NHF’s factory in Meru, Selangor, is still not yet running at full capacity, giving the group room to increase production to meet higher demand. The factory is running at under 90% utilisation at present. 

The group is allocating RM35 million in capital expenditure this year, mainly for product development and purchase of equipment.

On its exposure to forex fluctuation, Chin said the group is comfortable at the current level.

“Of course, we have a natural hedge, considering the fair split between our local and overseas market contribution,” Chin said, adding that the prevailing ringgit still allows it room to appreciate against the U.S. dollar.

At 2.48pm, NHF shares were traded unchanged at RM4.13, with 2,500 shares done, giving it a market capitalisation of RM310.4 million. Its share price has risen 28.3% since Jan 3.