Business

Friday May 15, 2009

New Hoong Fatt sets aside RM17m to widen product range

By LEE KIAN SEONG


PETALING JAYA: Automotive parts manufacturer New Hoong Fatt Holdings Bhd has allocated RM17mil this year to enhance and widen its product range.

Managing director Chin Jit Sin said most of the fund would be spent on product development, particularly in the car body segment.

The company currently has more than 10,000 items in its warehouses. It operates two plants, both located in Klang.

“We will fund the investment through our internally generated funds,” he told a press conference after the company’s AGM yesterday.

On its performance in the current financial year ending Dec 31, Chin said he expected the company to perform positively due in part to the stabilisation of material prices like steel and plastic resin.

“The Malaysian Automotive Association forecast new car sales to slow to 480,000 units this year compared with 548,115 units in 2008 but this doesn’t affect us directly as we run spare parts business. Thus, our sales are dependent on the number of vehicles on the road,” he said.

Chin said the local market contributed about 75% to total revenue last year and the balance was from overseas. The company sees a similar ratio this year.

“Our key markets are South-East Asia, the Middle East, Africa, and Central and South America,” he said, adding that the company exported to more than 30 countries.

New Hoong Fatt’s overseas business was affected by the global financial crisis last year, but there had been signs of recovery this year, Chin said.

Asked on its dividend payout, he said the company paid 11% last year and hoped to maintain the rate this financial year.

For the first quarter ended March 31, the company’s net profit dropped 2.5% to RM5.6mil due to higher material prices. Revenue increased 6.6% to RM45.5mil mainly due to contributions from its new subsidiary New Kean Tat Auto Parts Sdn Bhd.


NHFATT : [Stock Watch] [News]


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