SCH eyes Main Market in 2-3 years

by **Cals** Fri 14 Feb 2014, 08:36

Posted on 14 February 2014 - 05:38am

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From left: Deputy Federal Territories and Urban Wellbeing Minister Datuk Dr Loga Bala Mohan Jaganathan, M&A Securities Sdn Bhd executive director Bill Tan, Lau, SCH Group chairman Chan Wan Choon and executive directors Yeen Yoon Hin and Wong Sin Chin at the company's listing ceremony yesterday.

KUALA LUMPUR (Feb 14, 2014): SCH Group Bhd, which made its debut on the ACE Market of Bursa Malaysia yesterday, aims to transfer to the Main Market in two to three years by expanding into Southeast Asia and starting its foray into the high-end quarry industrial spare parts business.

Its managing director and deputy chairman Lau Mong Ling said the quarry specialist supplier has been trading low-end wear-and-tear parts in Malaysia for over 30 years and it plans to bring this into the Southeast Asian market.

"The wear-and-tear parts business is the same in the world, only that the key players are from Europe and US and they are using high-end products," he told a press conference after the group's listing ceremony here yesterday.

SCH started with supplying low-end quarry industrial spare parts like conveyor roller, conveyor belt and quarry grill. It now plans to go into high-end spare parts such as quarry drill, crusher, crane and loader, as all quarry players utilise both high-end and low-end products, said Lau.

The better profit margin in the high-end quarry industrial spare parts business will be able to drive its revenue for industrial products to over 40% of its revenue in the future from about 40% currently.

SCH is principally involved in the business of distribution and supplying of quarry industrial products, quarry machinery, quarry equipment and reconditioned quarry machinery, as well as the supply of its spare parts. It is also involved in the manufacturing and distribution of quarry grill.

Lau said SCH's market share in the domestic space can grow by 3% to 5% from 17% now, by increasing its range of products of quarry machinery, quarry equipment and reconditioned quarry machinery.

"Maybe our next step is to go to China to buy a factory and supply to the end-users. Usually manufacturers supply to dealers and our concept of selling directly to the end-users provide a good margin," said Lau.

SCH expects to set up offices in Indonesia, Thailand, Vietnam, Myanmar, the Philippines and Cambodia by leveraging on its existing customers that have foreign quarry operations and business operations in these countries.

SCH shares opened at 35 sen, a 12 sen or 52% premium over its issue price of 23 sen yesterday, with 7.21 million shares changing hands. It closed at 28.5 sen, up 5.5 sen, or 23.9%, with 197.2 million shares traded. The second most actively traded counter on the bourse yesterday.