KUALA LUMPUR (Oct 10): Johor-based furniture manufacturer SHH Resources Holdings Bhd (KL:SHH) said it is diversifying into the food industry by acquiring a majority stake in a health foods and frozen fruits company.

"The food industry in Malaysia has significant growth potential due to rising global demand and strong government support," said SHH in a filing with Bursa Malaysia.

The group has proposed to buy a 51% stake in Food Wise Network Sdn Bhd for RM7.3 million from Ang Seok Hong and Abdul Latif Mohd Nasir, who hold 41% and 10% shareholdings in the company, respectively. The transaction is expected to be completed by July 2025.

For the financial year ended June 30, 2024, SHH’s net profit rose 43.9% to RM5.03 million from RM3.5 million in the previous year, as its gross profit margin increased to 21.41% from 20.24%, primarily due to the weakening of the ringgit against the US dollar.

The group recorded lower operating expenses of RM11.72 million, compared to RM13.49 million previously, mainly due to a write-down in property development costs.

Revenue, however, was down by 3.4% to RM80.17 million from RM83.03 million, largely driven by a slowdown in customer demand and high container rates, which caused customers to delay furniture shipments.

At Thursday’s closing bell, shares of SHH dropped 15 sen or 11.54% to RM1.15, valuing the group at RM130 million.