Amid US-China trade war, Wegmans sees healthy sales orders from both sides

TheEdge Tue, May 21, 2019 07:05pm - 4 years View Original


KUALA LUMPUR (May 21): Home furniture maker Wegmans Holdings Bhd said the ongoing US-China trade war has resulted in greater business opportunities for the group.

"The export markets remain as the key growth driver for us, especially the US market where we received an influx of sales orders,” managing director Keh Wee Kie said in a statement issued after the group’s second annual general meeting in Muar, Johor, today.

Keh said the ACE Market-listed group has received higher enquiries and sales leads from US customers who are looking to shift their orders to Southeast Asia due to the US-China trade dispute.

He said revenue from the US market grew strongly in 2018, jumping 33% year-on-year from 21% a year ago, overtaking the Japanese market as its primary revenue contributor.

“We believe the favourable demand trend will prevail in 2019, as more buyers are switching their sourcing destination,” he added.

Keh noted that the group had also forayed into the original brand manufacturing (OBM) business under its own Collino Designs make, as part of its strategy to spur demand and further penetrate the Chinese furniture market — adding that this exercise is seen to be a growth catalyst for the group.

In addition, he added that the group is near full production capacity currently, and that its new factory will be equipped with updated technology that will see greater output and efficiency.

Keh said the group is optimistic on its long term prospects, which is underpinned by a favourable US dollar to ringgit exchange rate for its US customers, as well as opportunities from the US-China trade war.

“Over the long-term, we are positive that our efforts in penetrating into new market segments will continue to bear fruit and reflect in our future financial performance,” he said.

At the AGM, shareholder approved the previously-declared final single-tier dividend of 0.50 sen, which results in a total payout of RM2.5 million in 2018.

Shares of Wegmans closed 6.78% or two sen higher at 31.5 sen today, with 609,200 shares traded, giving the group a market capitalisation of RM147.50 million.

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