Chin Well targets new export markets with new products

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KUALA LUMPUR: Carbon steel fastener manufacturer Chin Well Holdings Bhd plans to expand its revenue base by widening its product range and targeting new export markets. Managing director Tsai Yung Chuan said the group has added two new products to its range in 2014 — high-security fences and gabions — which complement its main fastener manufacturing segment.

“These new products have high export potential and are timely for us to enhance our proposition in the competitive market. We are witnessing steady demand for high-security fencing from the domestic market and have also received orders from Australia, Taiwan and the Middle East, which will will be fully delivered in the next six months.

“We hope to leverage this initial success to expand our share in these countries, as well as enter into new markets in the Southeast Asian region in the near future,” said Tsai in a statement yesterday, adding that demand for gabions — steel cages or structures to prevent soil and riverbank erosion often used in the construction of highways and tunnels — is expected to rise further in the local market in view of the the implementation of various government projects.

On the group’s fastener segment, Tsai noted that Chin Well had established strong customer relationships with the largest Do-It-Yourself (DIY) retailers in Germany, France, the United States and Britain.

“With the sustained demand for DIY fasteners, we intend to expand our production capacity for small screws by expanding our workforce. We have recently received regulatory approval to employ additional foreign workers, who will be on board in early 2015, to help towards meeting the higher demand,” he said,

While Europe remains Chin Well’s largest export market, he said, the group believes that targeting new markets in the region would mitigate business prospects in the long term.

Chin Well shares, which were trading at RM1.32 a year ago, peaked at RM1.72 on Nov 13. The counter closed at RM1.45 yesterday, giving it a market capitalisation of RM395.17 million.

According to theedgemarkets.com, Chin Well has a 2.4 valuation score out of 3, with 3 suggesting that a company gives higher-than-market-average returns and is trading at a lower-than-average valuation. The site gave the company a fundamental score of 2.1 out of 3, with 3 suggesting that it is profitable and has a strong balance sheet. It also rated Chin Well’s counter at 2 in terms of volatility on a scale of 1 to 5, with 1 being the least volatile.

 

This article first appeared in The Edge Financial Daily, on December 23, 2014.