KUALA LUMPUR: Penang-based IQ Group Holdings Bhd, a niche player in sensor-controlled LED lighting, is looking to penetrate the Middle East market over the next 12 months through tie-ins with trade show events.
“We’re exploring markets where we perceive there will be significant opportunities and one that we’re in the midst of exploring is the Middle East,” IQ Group chief executive officer Daniel John Beasly told The Edge Financial Daily in a telephone interview.
He said it is too early to give an estimate of the Middle East market’s contribution to the group’s revenue.
Meanwhile, IQ Group (fundamental: 2.4; valuation: 1.8) is working with a distributor based in Singapore to market the group’s new industrial lighting brand, Lumiqs across Southeast Asia.
“The response to our lighting solutions under the Lumiqs brand name has been tremendous. Going forward, we see great opportunities for the product and we should see positive contributions [to our revenue] within the next three to four years.” said Beasly.
According to Beasly, the Lumiqs brand of LED products will enable users to save up to 90% of energy through intelligent lighting solutions which automatically adjust its lighting intensity when human presence is detected.
The group has continued to maintain its edge as a supplier of sensor-controlled LED lighting as it continues to grow unhindered in the local market.
While the weakening of the ringgit continues to weigh on local businesses which primarily rely on imports, export-driven companies like IQ Group stand to gain.
Its group financial controller Chee Ting Ting said IQ Group is expected to see “significant improvements” in terms of profit margins as a result of the weakening ringgit.
“The results for our upcoming quarter will be quite positive,” she said. Chee also expects the impact of the impending goods and services tax (GST) on the group to be muted as all goods exported from Malaysia are zero-rated.
“We’re an export-based company and 99% of our revenue is from exports. So, basically all of our exports are exempted from the consumption tax,” said Chee.
She added that the group has applied for the Approved Trader Scheme (ATS), which allows a company to claim back any GST incurred on goods imported.
According to the Royal Malaysian Customs, the ATS will allow traders to suspend the GST payable on imported goods at the point of importation. This scheme was introduced as a means to help re-exporters alleviate cash flow problems.
For the second quarter ended September 2014 of financial year 2015, IQ Group posted a smaller net profit of RM6.35 million from RM6.76 million a year ago, while revenue rose marginally to RM52.46 million from RM51.53 million a year ago.
IQ Group’s largest contributor of revenue comes from the United Kingdom (30.6%), followed by Continental Europe (29.2%), Japan (23.6%) and the United States (13.4%). Some of the group’s customers include Honeywell, Osram, Philips, Hager and Elpa Asahi Electric. In terms of product categories, LED lighting and door entry products contribute up to 57% of revenue, while passive infrared sensors and other non-LED lighting sensors make up the balance.
Year to date, IQ Group’s shares have risen 33% from RM1.57 on Jan 2 to close 14 sen or 7.18% higher at RM2.09 last Friday, giving it a market capitalisation of RM180.97 million.
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This article first appeared in The Edge Financial Daily, on February 16, 2015.