KUALA LUMPUR (Nov 23): Stainless steel cookware manufacturer Ni Hsin Resources Bhd has tied-up with National Cooperative Bhd (Angkasa) to market and distribute multiply stainless steel cookware under a new brand named "PENTOLI".
In a filing with Bursa Malaysia, Ni Hsin Resources announced that the company, and MyAngkasa Holdings Sdn Bhd (MHSB) — a wholly owned subsidiary of Angkasa, have today penned a shareholders agreement to form a joint venture company named MyAngkasa Ni Hsin Sdn Bhd.
Angkasa is the apex body of the co-operative movement in Malaysia, which represents about 12,000 co-operatives nationwide.
According to the agreement, Ni Hsin will hold a 70% stake in the new company at the subscription price of RM1 per share for 70,000 new shares. The remaining 30% will be held by MHSB.
New company's board of directors will comprise 5 directors, 3 of which will be appointed by Ni Hsin and the balance to be appointed by MyAngkasa Holdings.
The objective of the joint venture will be to market and distribute the newly-launched brand of premium multiply stainless steel cookware, known as PENTOLI (cookware).
Under the shareholder agreement, Ni Hsin will be responsible for managing the business operations, as well as to manufacture and supply premium multi-ply stainless steel cookware and related products to the new company.
Meanwhile, MHSB shall make available, or procure Angkasa to make available, its customer network for the marketing and distribution of the new company's products, which includes in the MHSB or Angkasa's online shopping portal.
Ni Hsin's managing director, Chen Shien Yee, said in the shareholders agreement signing ceremony that the new company will provide Ni Hsin with the opportunity to leverage on the vast customers network of Angkasa to build and expand Ni Shin's cookware and related business that will contribute sustainable positive earnings to Ni Hsin.
"The cooperation is envisaged to help broaden Ni Hsin's exposure in other market[s] and we will continue to strengthen our products' value proposition, " he said.
Angkasa's vice-president Dato Kamarudin Bin Ismail said that he expects this product to be able to achieve up to RM10 million in gross sales to the new JV, since the launching today until the end of 2016.
In addition, Chen said the new company has agreed to adopt a dividend policy to declare and pay out not less than 20% of its balance profit after tax as dividend to the shareholders.
"I am truly excited about this strategic joint effort that will deliver great value to our customers across all segments. Ni Hsin has an array of diverse and innovative products in the pipeline to be offered, and we are confident that this will be the catalyst for the company's growth," Chen added.
With the strategy of competitive pricing, quality assurance and flexible order quantity, Chen expects substantial growth in the clad metal and convex mirror business in Europe.
Ni Hsin's executive director Datin Ida Suzaini Binti Abdullah also said that China, which is a large enough market to provide lucrative return, is the company's first targeted overseas markets for the product.
"We feel that now would be the right time for a brand like this to make its debut in China, given the consumer trends and behavior patterns amongst mainland China," she said.
Currently, Ni Hsin exports its products to countries like Japan, Korea, Taiwan, China, Hong Kong, Thailand, Indonesia, Europe, USA, Canada, Australia and others. Export sales accounted for 89% of the revenue of FY2014, with local sales accounting for 11%.
Ni Hsin returned to profitability with a net profit of RM1.5 million in its third quarter ended Sept 30 (3QFY15), mainly due to foreign exchange gains. It made a net loss of RM159,000 in the previous year's corresponding quarter.
At noon, Ni Hsin shares fell 1 sen or 2.74% to 35.5 sen, which valued it at RM83.3 million.
Year-to-date, the shares had dropped 17%.
(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.)