Chin Well net profit jumps 53%, despite lower revenue

by **Cals** Thu 21 May 2015, 22:41

Chin Well net profit jumps 53%, despite lower revenue

KUALA LUMPUR (May 21): Chin Well Holdings Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) posted a 53% jump in its net profit to RM10.95 million or 3.94 sen per share for the third quarter ended March 31, 2015, from RM7.12 million or 2.61 sen per share a year earlier.
The improvement in profit was despite a 9% decline in revenue to RM119.64 million for the quarter, from RM130.76 million in the previous year.
In its filing with Bursa Malaysia, Chin Well (fundamental: 2.1; valuation: 2.0) said its fasteners products segment posted lower revenue for the quarter under review, due to a slowdown in sales in Europe and Malaysia.
“Some of the local traders were clearing their inventories on hand and had temporarily [placed] on hold their new orders prior to the implementation of the GST (goods and services tax) effective 1 April 2015," it said.
However, the sale of its do-it-yourself (DIY) products generated higher margins, which contributed to the higher profit of the division.
Meanwhile, its wire products segment saw better revenue and profit for the quarter, due to higher sales.
For the cumulative period, net profit rose 39% to RM28.24 million from RM20.38 million in the previous year’s corresponding period, while revenue climbed 4% to RM372.89 million, from RM356.95 million.
Going forward, the group expects to perform satisfactorily in the final quarter of its financial year ending June 30, 2015, as it plans to expand its DIY retailer distribution network, which will provide better margins to the group.
Chin Well share price closed 12 sen or nearly 8% higher at RM1.64, giving a market capitalisation of RM455.29 million.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)