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PETALING JAYA: Yenher Holdings Bhd expects to continue the double-digit growth trend in revenue this year, with the group’s operations mostly unaffected by the movement restrictions.
The Penang-based group is categorised as essential services, as it manufactures and distributes animal health and nutrition products, as well as provides value-added diagnostic and material analyses.
Both Yenher’s manufacturing plants have been running at full capacity in recent months.
“The impact of the movement restrictions on our output is minimal although we can only operate with 60% workforce and more recently, an 80% workforce capacity, in accordance with the lockdown’s standard operating procedures,” group managing director Cheng Mooh Tat told StarBiz.
Regarding its overseas expansion plans, Cheng said the group had recently inked a three-year distribution deal worth US$200,000 (RM829,300) annually with a customer in Taiwan for livestock biotech products developed in-house.
“Our customer approached us to become our distributor in Taiwan, after his pigs became renowned for quality at auction markets. He is confident about the results that our products deliver and this will help to improve our brand presence in Taiwan,” he said.
Cheng added that Yenher is also in talks with companies in Indonesia and China for joint ventures and collaborations, and hopes to announce “positive news in the fourth quarter of 2021 or first quarter of 2022.”
For its financial year ended Dec 31, 2020 (FY20), about 90% of the group’s revenue was from Malaysia and the balance 10% from overseas markets.
Indonesia was the largest export sales contributor (4.3% of revenue), followed by Brunei (3.45%), with the balance from Hong Kong, Belgium, Pakistan, South Korea, Nigeria, Thailand, Vietnam, Singapore and Taiwan.
Meanwhile, since the group’s listing on July 15 on the Main Market, its share price has been trading below its initial public offering price (IPO) of 95 sen. Yenher’s stock closed at 92 sen last Friday.
Cheng said there may be a misperception among investors that the group is an animal feed miller.
“We supply premixes and formulated products to the animal feed millers, who comprise almost 80% of our customers,” he explained, adding that premixes are a mixture of vitamins, minerals, amino acid, anti-fungus, anti-oxidant, pro and pre-biotic and other nutritional additives.
“Our premixes are very important elements of the complete animal feed. Premixes accounted for 37.4% of our revenue in FY20,” said Cheng.
A report dated June 8, 2021 by independent market researcher Protege Associates Sdn Bhd indicated that Yenher has a market leadership position, based on its FY20 revenue, which was 9.3% of the estimated RM2.18bil animal health and nutrition industry revenue in Malaysia in 2020.
Other companies in the animal health and nutrition industry include Rhone Ma Holdings Bhd and Peterlabs Holdings Bhd.
Cheng highlighted that Yenher’s competitive strengths include its wide portfolio of products which serves farmers, feed millers as well as livestock integrators operating in the poultry and swine sub-sectors.
“We have been in the market for over 30 years and are known as a one-stop solutions provider for our customers. We have a strong focus in product research and development, and employ 11 veterinarians and six chemists,” he said.
Recently, Yenher had commercialised a new in-house developed probiotic additive after receiving positive outcomes from farm trials.
“We started selling this product in August. Our objective was to reduce the odour and ammonia emissions from the poultry and swine farms.
“A bonus side effect of this probiotic additive is it also seems to prevent skin issues in the livestock and reduce fly populations by up to 90%,” said Cheng.
Yenher’s IPO exercise had raised RM61.21mil, of which RM31mil will be used to build a new GMP (good manufacturing practices)-compliant plant, RM9.7mil to buy machineries and equipment for the new plant, RM16.71mil as working capital and the remaining RM3.8mil for listing expenses.
The new plant, located on a freehold 464,786-sq-ft land owned by Yenher, is expected to be operational in the fourth quarter of 2023, and will house all the group’s operations on one site.
“We have signed the contracts to buy the machineries. However, our submission of building plans for the new plant to the authorities has been delayed by the lockdown,” said Cheng.
For its second quarter ended June 30, 2021, Yenher posted a net profit of RM6mil and revenue of RM67.2mil.
For the six months of FY21, net profit was RM10.93mil while revenue was RM126mil. Earnings per share stood at 4.64 sen for the first half.
The group has declared a second single-tier interim dividend of 1.5 sen per share, with the ex-date on Sept 13 and payment date on Oct 6, 2021.
Yenher has a dividend policy of paying out at least 40% of its net profit.
