Thursday 28 Mar 2024
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KUALA LUMPUR: Profit contribution from the property development segment that is set to take off will exceed that of FCW Holdings Bhd’s main contract manufacturing business.

“Going forward, we think that profit contribution from the property development segment will probably overtake that of contract manufacturing,” FCW director Thor Poh Seng told reporters after the annual general meeting yesterday.

In March this year, the firm’s shareholders gave their approval to undertake a 50:50 joint venture with IJM Land Bhd to develop a 15.4-acre (6.23ha) piece of freehold land in Segambut, Kuala Lumpur.

FCW is still in the planning stages for the development dubbed 368 Residences. 

Thor expects to obtain the development order and other relevant approvals by the middle of next year.

It was reported the development will take some six years to complete, with a launch expected in 2016.

But for now, Thor said the firm would continue with its existing contract manufacturing business as an earnings driver next year.

“So, pending the take-off from the property development segment, the contribution of profit and revenue will still come from the contract manufacturing business,” he said.

FCW financial controller Aaron Wong said the firm aims to raise its contract manufacturing exports revenue to 30% to 35% from the current 20%.

It plans to produce more high-end skincare and haircare products to achieve the target, he added.

In addition, Thor denied any injection of assets or implementation of corporate exercises by chairman Tan Sri Robert Tan Hua Choon to unlock value in FCW.

“Right now, there is none. If there is any, we will make the necessary announcement,” he said.

FCW shares fell 15 sen or 10.71% to close at RM1.25 yesterday, giving it a market capitalisation of RM350 million.

According to theedgemarkets.com, FCW’s valuation score stood at 1.80, on a scale of 0-3, with 3 suggesting a company gives higher than market average returns and is trading at a lower than average valuation.

Its fundamental score stood at 1.35 on a scale of 0-3, with 3 suggesting that it is profitable and has strong balance sheet. FCW’s stock also has a volatility rate of 4, which measures the volatility of a stock based on its share price movements relative to the whole market over a period on a scale of 1 to 5, with 1 being the least volatile.

 

This article first appeared in The Edge Financial Daily, on December 17, 2014.

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