KUALA LUMPUR (May 27): Fastener and wire products producer and trader Chin Well Holdings Bhd saw its net profits for the third quarter ended March 31, 2022 (3QFY22) soared by 274% year on year (y-o-y) to RM63.4 million, compared with RM18.3 million in the corresponding quarter.

The better performance in the 3QFY22 was due to the better profit margins that the fastener and wire products segments enjoyed during the quarter, as a result of higher average selling prices, said Chin Well in the financial results announcement to Bursa Malaysia on Friday (May 27).

During the nine-month period to March 31, 2022, the group achieved a total revenue and total profit before tax (PBT) of RM460.97 million and RM87.11 million respectively. The group's total revenue increased by 27.6% in the current reporting period.

Meanwhile, its PBT increased by RM62.81 million to RM87.11 million, as compared to RM24.3 million in the corresponding period in the preceding year.

“This is in line with the higher revenue generated in addition to the better profit margins enjoyed by both the fastener and wire divisions, following the increase of its average selling price in the current reporting period,” the group said in the financial statement.

In view of the shortage of supply of wire rod in the global market, Chin Well said it had been stocking up its raw material to ensure there is sufficient inventory for its production requirement.

Chin Well is also cautiously optimistic of its prospects. The remaining quarter is expected to be better as compared to the previous financial year despite ongoing global uncertainties, as the global industrial fastener demand is expected to gradually return to pre-pandemic levels in the foreseeable future, it said.

“In view of the positive progress of the vaccination programme in the country, the group expects the construction projects in Malaysia, which were adversely affected since the Movement Control Order period, to progressively restart, resulting in deliveries to customers in the related industries.

“The increasing wire rod market price is also expected to benefit the group's performance,” said Chin Well.

Chin Well closed at RM1.49 on Friday, giving it a market capitalisation of RM446 million. Over the last one year, the counter had appreciated by 13.1% and is currently trading at a trailing four quarter price to earnings ratio of 5.81 times.