2016 - PETALING JAYA: GUH Holdings Bhd is venturing into the education sector by acquiring 25% equity interest in international school operator Straits International Education Group Sdn Bhd (SIEG) for RM11mil
PCB manufacturing remains GUH Holdings’ bread and butter
The Edge Malaysia
October 14, 2021 15:00 pm +08 This article first appeared in The Edge Malaysia Weekly, on October 4, 2021 - October 10, 2021. H’ng: Thanks to the semiconductor boom, our PCB sales in Malaysia are still performing well as usual
H’ng: Thanks to the semiconductor boom, our PCB sales in Malaysia are still performing well as usual
MAIN Market-listed GUH Holdings Bhd may be more diversified these days, but its bread and butter is still substantially printed circuit board (PCB) manufacturing.
GUH has businesses in property development, water and wastewater solutions, plantations, education and electrical appliances, and recently ventured into Taiwan’s solar power industry with Leader Energy Group through a joint-venture vehicle.
Group CEO and managing director Datuk Seri Kenneth H’ng Bak Tee is well aware that PCB manufacturing contributes the lion’s share of revenue at 83%, compared with 9% for the property division, and 8% for utilities.
“PCB is still our key division and we are trying to grow the business by way of capacity expansion and new product development ... It will continue to be the main division for us over the next five to 10 years,” he tells The Edge in a phone interview.
“We have been trying to balance the contribution between PCB and the other divisions. The PCB division has been contributing well to the group, and the other two will be picking up soon. We are still quite satisfied with the current proportion as long as all three divisions continue making profit.”
H’ng reveals GUH has been working to divest non-core businesses in recent years so that more resources can be allocated to grow other core businesses, particularly utilities, as well as other infrastructure projects and investments in solar power.
Appointed to the board in 2004, 61-year-old H’ng says revenue and profit from the PCB business is expected to continue to “grow healthily”, and that many of GUH’s solar power projects in Taiwan are also expected to contribute to group income.
H’ng is the brother of GUH executive chairman Tan Sri H’ng Bok San and non-executive director Datuk Harry H’ng Bak Seah. His niece, Datin Seri Jessica H’ng Hsieh Ling, also sits on the board as non-executive director.
One of the oldest listed companies on Bursa Malaysia, GUH was incorporated in 1961 as Textile Corp of Malaya Ltd, before it was listed on the Kuala Lumpur Stock Exchange and the Stock Exchange of Singapore (SES) in 1968.
But following the stock market crash resulting from the Pan-Electric Industries Ltd crisis in 1985, GUH — then known as Grand United Holdings Bhd, which was an indirect substantial shareholder of Pan-Electric Industries — was delisted from the SES in 1990 in compliance with the Malaysian government’s policy.
In 1994, via a reverse takeover, the H’ng family acquired Grand United Holdings, which was then controlled by former MCA president Tan Sri Tan Koon Swan.
Following the emergence of the H’ng family, Grand United Holdings implemented a restructuring scheme and acquired MC Industry Sdn Bhd — now known as GUH Electronic Holdings Sdn Bhd — and its subsidiaries involved in the manufacturing of PCBs.
In 2005, the company’s name was changed to GUH, and the rest is history. Today, it is estimated that the H’ng family members collectively own about 20% of GUH. Other prominent shareholders include Gold Connection Assets Ltd (17.19%), DBS Securities and Fiduciary Services (2.75%), and low-profile investor Chee Sai Mun (0.66%).
It is worth noting that GUH is in the midst of negotiations with the Chinese government to shut down its PCB plant in Suzhou, China, as part of the city’s urban development. The group expects compensation from the government once all terms are agreed upon and agreements are signed.
“We are talking about loss of profits, compensation to the workers, machinery, land, buildings and many other expenses. Although there is no conclusion yet, I think we are getting closer to an agreement on the compensation amount. We hope that we can complete the deal by the end of this year or first quarter of next year,” says H’ng.
Once this chapter is closed, GUH will be planning its next move.
“With tighter environmental control in China, we might exit the China operations if we cannot find a new area there for relocation. Apart from China, we are also considering Thailand and Vietnam for a possible site relocation,” he adds.
GUH is expanding its PCB operations in Penang and spending about RM10 million a year to increase its production capacity.
“We are currently running at full capacity and we can’t even fulfil some orders. Customers are knocking on our doors almost every day. Frankly, our expansion is not catching up with the demand. Overall, for our PCB business, we expect to see at least a 15% revenue growth for FY2021, to be followed by 8% in the subsequent years,” H’ng explains.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Musfaz83
619 posts
Posted by Musfaz83 > 2021-10-08 09:52 | Report Abuse
Sold 50.5c