Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily, on September 25, 2015.

 

GEORGE TOWN: IQ Group Holdings Bhd will be channelling much of its efforts in the next three years to cultivating the growth potential of its new product — the intelligent light-emitting diode (LED) lighting product that is used in the industrial sector.

The Lumiqs brand of the product is expected to be the next growth catalyst for the Penang-based company’s future earnings, according to IQ Group managing director and chief executive officer Daniel Beasley.

“There has been a real momentum in terms of Lumiqs sales within this short period of time since its launch in February. We believe it will be a major contributor to revenue within the next three years,” he told The Edge Financial Daily after the company’s annual general meeting on Wednesday.

The new product combines the company’s competency in sensor technologies with intelligent communications applications and expertise in lighting. IQ Group manufactures sensor-controlled lighting products.

“We have engaged a Singaporean company called Syspex Technologies Pte Ltd as our distributor to help us to market our product across Southeast Asia, and so far the response has been good, with anticipated sales orders from a large Singaporean company which requires a substantial quantity of units,” he said.

With 99% of  sales derived from exports, IQ Group has also established agents in New Zealand, Australia and Switzerland to market its products. “There is also interest from new markets which we have not tapped into before, such as South Africa, Kenya and Pakistan,” said Beasley.

However, he said it is too soon to predict Lumiqs’ contribution to the group’s sales.

Sensor-controlled lighting products remain as IQ Group’s main revenue driver for the current financial year ending March 31, 2016 (FY16).

“Even as our new product kicks in, we will not neglect our original design manufacturer business which will be our main revenue contributor for FY16,” said Beasley.

For its first financial quarter ended June 30, 2015 (1QFY16), IQ reported a net profit of RM6.43 million, which is 14% lower than its 1QFY15 net profit of RM7.47 million. Quarterly revenue also dropped almost 12% to RM50.03million, from RM56.74 million in the previous corresponding quarter.

“Our 1QFY16 performance was mainly brought down by lower sales because of the type of business we are in. There will be orders from our customers based on activities and promotional projects that they may have. These, in turn, will have implications on our business. It all boils down to the timing of the orders,” said Beasley.

However, he added that the weak ringgit will be a boost to the company’s financials, considering a large bulk of its products are for exports.

“Forex, of course, will always have implications one way or another, as we do purchase some components in US dollars, but generally it will be more of a positive to us,” said Beasley.

IQ Group’s main export markets are the United Kingdom (28%), continental Europe (28%), Japan (23%) and other Asia-Pacific countries, as well as the United States.

Year to date, IQ Group’s share price gained 30.2% to close at RM2.07 on Wednesday, with a market capitalisation of RM182.13 million.

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