KUALA LUMPUR (Dec 24): Plywood products maker Cymao Holdings Bhd has proposed to diversify into the construction and project management business.
Cymao said it plans to explore new business opportunities to reduce its reliance on the plywood business.
"Whilst the group will continue with its plywood business, the group intends to secure more construction-related contracts in the future," it said in an exchange filing today.
Loss-making Cymao expects the construction business to contribute to more than 25% of its net profit in the future.
The group recorded a net loss of RM1.58 million with a revenue of RM28.95 million for the financial year ended Dec 31, 2017 (FY17).
For FY18, it posted a net loss of RM1.34 million on revenue of RM17.57 million, and for FY19, it registered a net loss of RM4.78 million on revenue of RM11.91 million.
Cymao said the losses were mainly attributable to decreasing demand for plywood products in both local and export markets, increasing competition in terms of pricing and declining profit margins, and fluctuating costs of raw materials due to unstable supply of logs.
"Notwithstanding the proposed diversification, the group intends to further streamline its plywood business to improve the efficiency of its operations," it added.
On Dec 9, Cymao was slapped with an unusual market activity query over the sharp rises in its share price and volume. The counter surged 26.26% or 13 sen that day to close at 62.5 sen on a volume of 4.78 million shares.
The group, in its response, said it was in the final stages of discussion with several parties on a potential new viable business venture.
Today, Cymao shares closed six sen or 5.94% higher at RM1.07 with a market capitalisation of RM80.25 million. The counter saw 4.95 million shares done.
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