KUALA LUMPUR (Sept 13): Automotive lighting product manufacturer JHM Consolidation Bhd plans to team up with its Chinese counterpart Jiangsu Dekai Auto Parts Co Ltd (DEKAI) to sell automotive lighting products in Malaysia and other Southeast Asian countries.

In a filing with Bursa Malaysia on Wednesday, JHM said it has entered into a memorandum of understanding (MOU) with DEKAI to record the intention of the two companies to form a joint venture (JV) company called JHM DEKAI Auto Lighting Sdn Bhd, which will design, manufacture, market and sell automotive lighting products here and in other Southeast Asian countries.

JHM will hold a 55% stake in JHM DEKAI Auto Lighting and DEKAI, the remaining 45%.

"There is no contract value stated as the MOU marks the intention of the parties to form a JV," said JHM.

DEKAI is a manufacturer of automotive lighting products that offers services such as design and engineering, injection moulding, full lamp assembly, and complete lamp testing for original equipment manufacturing (OEM) customers. DEKAI is one of China’s Tier 1 players, with the ability to transition through design to prototype, and into mass production of complete interior, rear and head lighting.

"Both parties will collaborate closely to leverage their strengths, knowledge, and resources in the automotive lighting products market to achieve significant market share in Malaysia and Southeast Asian countries, to expand globally and to ensure success of the JV," said JHM.

It added that the MOU is not expected to have material effects on the group's earnings, net assets and gearing for the financial year ending Dec 31, 2023. "But should the agreement materialise, it is expected to contribute positively to the future earnings of the company," it added.

At 3.42pm on Wednesday, JHM shares were traded down 0.5 sen or 0.62% at 80 sen, giving it a market capitalisation of RM481.77 million. The stock's share price is up 9.6% so far this year.