KUALA LUMPUR: China-based bamboo flooring manufacturer Kanger International Bhd is targeting revenue growth of 30% to 150 million yuan (RM88.04 million) for the current financial year ending December (FY15), as it expands its presence in the upstream sector. It posted a net profit of RM7.02 million on revenue of RM66.72 million in FY14.

“Based on the current market conditions, I think we can reasonably target sales of 150 million yuan for FY15,” managing director Leng Xingmin told reporters after the group’s extraordinary general meeting (EGM) yesterday.

He said Kanger is enjoying low operating cost with less market competition.

Kanger is looking to venture upstream by growing bamboo and has set its eyes on acquiring land either in Perak or Yunnan, China.

Leng said the group is currently in talks with the Perak government on the possibility of leasing state land, but the talks are still preliminary.

Kanger had previously indicated it intends to venture into the upstream segment, namely bamboo plantation, in order to produce raw bamboo materials for its manufacturing line.

Earlier at the EGM, Kanger shareholders approved its proposal to raise RM100 million via a redeemable convertible medium-term note offer.

The proceeds will be primarily used for land acquisitions (RM30 million), while the balance will be used: (i) to construct a commercial building in Ganzhou, China (RM22.5 million); (ii) for the expansion of dealerships (RM13.5 million); (iii) for working capital (RM27.4 million); and (iv) for expenses for the exercise (RM6.6 million).

Leng also said the group is mulling setting up dealerships in Malaysia to widen its distribution network.

“Now we have about 30 dealerships in China and we hope to expand more, not only in China but to Malaysia as well,” he said.

According to the group’s circular to shareholders, Kanger intends to award another 80 dealerships this year.

Kanger’s shares closed up 1.23% at 41 sen yesterday, bringing a market capitalisation of RM208.98 million.

This article first appeared in The Edge Financial Daily, on April 8, 2015.