1) Based on the FY2014
annual report, Mr Lim mentioned in his chairman statement that the group
secured new contract from the largest DIY fastener supplier in German and
France. Are the contracts long term base or by order base? Approximately how
much they will contribute to the group's result in FY2015 compared to FY2014?
A: Such contracts are
typically received quarterly. DIY segment made up 11% of group revenue in
FY2014 and we hope to increase the contribution in FY2015.
(p/s: I hope also )
(p/s: I hope also )
2) Mr Lim also mentioned
that the group invested a substantial amount in new machine and is expected to
be commissioned at the end of 2014. May I know what is the progress now? The
new machines are expected to improve production output or improve efficiency?
A: The machinery has been
installed, and are expected to enhance efficiency.
3) EU had imposed a five
year anti-dumping duty on imports of iron and steel fasteners originating in
PRC in 2009 and is set to expire in Oct 2014. Is that any update on the
extension of the duty?
A: The industry is awaiting EU’s decision. Meantime, the
existing anti-dumping duty applies.
4) Is the raw material of
Chin Well Holding’s products mainly from carbon steel? What forms are they?
A: Fasteners are
made of higher grade carbon steel wire rod, which are made to reach
the mechanical properties required by different standards; while
Chin Herr’s raw material is from construction grade wire rod for basic foundation use.
5) The group’s trade
receivables turnover is quite high and there is high percentage of trade
receivables past due more than 60 days. How does the group tackle this issue
and manage its credit risk?
A: It is normal for
local market or the South East Asia market to have payment term of 90
days or more. Our marketing department has weekly meetings to keep track of
customer's payment and control the shipment to make sure every customer is
within the credit limit.
(p/s: To me, the credit term is little bit long, perhaps it's industry norm? )
(p/s: To me, the credit term is little bit long, perhaps it's industry norm? )
6) It’s noted that the
group’s borrowings are all denominated in USD currency and the current trend is
that the USD will strengthen against MYR. Does the group contemplating to
convert the loan into MYR currency or others?
A: The export sales which
takes up more than 70% of the group revenue are either in USD or EUR, therefore
the purchase of raw material in USD is a natural hedge. Furthermore the
interest rate for borrowing USD is less than 1% while the interest rate for
borrowing MYR is more than 4%.
We don't see it will do
us any good by converting the loan from USD to MYR with a loss in currency
change, then pay a higher interest rate with MYR borrowing, then take
up another currency change loss by turn MYR in to USD to pay back to the
suppliers.
(p/s: I should find this in the annual report. It's stated there :) )
(p/s: I should find this in the annual report. It's stated there :) )
tq for ur sharing~
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