KUALA LUMPUR: JCY International Bhd is expected to continue its growth into 2QFY12 ending March 31, continuing its good numbers for 1QFY12.
“We are on target and are able to achieve as good as what we are achieving right now [for 1QFY12 ended Dec 31],” James Wong, the group’s finance director, told a media briefing yesterday. The group announced its 1QFY12 results yesterday.
The hard disk drive (HDD) component manufacturer posted a net profit of RM162.45 million for 1QFY12, a 2,063% year-on-year (y-o-y) increase from its net profit of RM7.51 million in the previous corresponding period.
Wong said its performance was 50% attributable to the advantages it gained over its competitors due to the floods in Thailand in October last year. His group also made some internal changes to increase output and to reduce costs.
JCY was one of the few HDD component producers able to continue to supply its main vendor, Seagate Techonology plc, as its Thai operations were not affected by the flooding.
There was a shortage in HDD component products and drives as many producers had to shut down their Thai operations. This disrupted the HDD supply chain which increased the average selling prices, contributing to JCY’s increase in profit.
Addressing the issue of sustainability, Wong said: “The full recovery in terms of the supply will not be (seen) until 2013.”
“The first thing to do is to capture global market share,” he said, adding that JCY is at an advantage as its competitors could face hurdles in re-establishing their HDD operations, and it is not easy for newcomers to enter the HDD industry.
“The demand is there, the question is how can you provide (supply),” Wong said.
As part of its initiative to increase its market share, the group announced in early January that it would spend RM300 million over the next 24 months to expand its facilities in Malaysia, Thailand and China.
“Some 80% of the expenditure is on machinery and the other 20% is on infrastructure,” said Wong. The group is purchasing new machinery which will help increase output of HDD components.
JCY is opening a plant in Guangzhou, China in June in addition to its other China plant in Suzhou. Wong said his group is expecting the Guangzhou plant to have a high efficiency partly due to its strategic location close to a port.
The group’s net profit is a complete turnaround from its previous financial standing a year ago. JCY previously posted losses for 3QFY11 due to a combination of lower selling prices, smaller sales volume and a weaker US dollar.
The group’s stock has been on an uptrend since the Thai floods in October, closing at a 52-week high on Feb 3 at RM1.42. It closed yesterday one sen lower at RM1.41 with 39.72 million shares changing hands.
This article appeared in The Edge Financial Daily, February 9, 2012.
“We are on target and are able to achieve as good as what we are achieving right now [for 1QFY12 ended Dec 31],” James Wong, the group’s finance director, told a media briefing yesterday. The group announced its 1QFY12 results yesterday.
The hard disk drive (HDD) component manufacturer posted a net profit of RM162.45 million for 1QFY12, a 2,063% year-on-year (y-o-y) increase from its net profit of RM7.51 million in the previous corresponding period.
Wong said its performance was 50% attributable to the advantages it gained over its competitors due to the floods in Thailand in October last year. His group also made some internal changes to increase output and to reduce costs.
JCY was one of the few HDD component producers able to continue to supply its main vendor, Seagate Techonology plc, as its Thai operations were not affected by the flooding.
There was a shortage in HDD component products and drives as many producers had to shut down their Thai operations. This disrupted the HDD supply chain which increased the average selling prices, contributing to JCY’s increase in profit.
Addressing the issue of sustainability, Wong said: “The full recovery in terms of the supply will not be (seen) until 2013.”
“The first thing to do is to capture global market share,” he said, adding that JCY is at an advantage as its competitors could face hurdles in re-establishing their HDD operations, and it is not easy for newcomers to enter the HDD industry.
“The demand is there, the question is how can you provide (supply),” Wong said.
As part of its initiative to increase its market share, the group announced in early January that it would spend RM300 million over the next 24 months to expand its facilities in Malaysia, Thailand and China.
“Some 80% of the expenditure is on machinery and the other 20% is on infrastructure,” said Wong. The group is purchasing new machinery which will help increase output of HDD components.
JCY is opening a plant in Guangzhou, China in June in addition to its other China plant in Suzhou. Wong said his group is expecting the Guangzhou plant to have a high efficiency partly due to its strategic location close to a port.
The group’s net profit is a complete turnaround from its previous financial standing a year ago. JCY previously posted losses for 3QFY11 due to a combination of lower selling prices, smaller sales volume and a weaker US dollar.
The group’s stock has been on an uptrend since the Thai floods in October, closing at a 52-week high on Feb 3 at RM1.42. It closed yesterday one sen lower at RM1.41 with 39.72 million shares changing hands.
This article appeared in The Edge Financial Daily, February 9, 2012.
