| economy is still weak and
Europe is facing serious sovereign debts crisis in Greece, Ireland
and potentially a few more other European countries. The unrest in
the Middle East and the recent earth quake in Japan have further
increased uncertainties and risks that could potentially derail the
recovery of the global economy and impact our business. Aluminum
prices have continued to remain high. This will have an adverse
impact on the gross margins of our manufacturing business. In
addition, the volatility of the US Dollars, Japanese Yen and Euro
may also potentially affect our manufacturing
business. However, the Group is committed to manage these challenges
with appropriate hedging strategies, to control and reduce operating
costs and achieve higher efficiency for a sustained performance in
our business.
Q : The Group unveiled its 5-year
expansion plan recently. Care to elaborate on it?
A : The Group’s 5-year expansion plan (FY2011 to FY2015)
will see us increase our production capacity of an additional 5
million alloy rims through expansion of our existing manufacturing facilities in China, Taiwan and Malaysia. We hope to capitalize
on opportunities that have arisen as demands from the China and
ASEAN markets are expected to grow exponentially. We feel that it is
the right time to enter the Original Equipment Market (OEM) market
in a more significant manner, targeting the China
and Malaysia OEM markets for a start. We plan to complete
installation of our first one million OEM capacity in Shanghai by
third quarter of 2011.
For our distribution business, we will put into place a new
marketing strategy which will involve implementing multi-brand,
multi-category and multi-product sales initiatives for all of our
sales offices and appointed distributors worldwide.
Multi-brand strategy enables us to achieve a wider consumer base,
offering different brands for different consumer segments. By having
a multi-product strategy, our sales network will offer all the
product types carry by YHI, that is, tyres, alloy rims,
automotive & industrial batteries, golf & utilities buggies. A
multi-category strategy will broaden our product offerings of
different categories such as tyres for passenger cars, light trucks,
vans, trucks & bus, industrial and off the road (OTR) tyres etc. We
want to take a more proactive approach to fill gaps that were in our
earlier marketing and distribution
strategy. We will also be opening up new distribution offices in new
territories to increase our sales network.
Q : The Group has always posted good results
year in year out. FY2010 was no exception. What is your outlook for
FY2011 then?
A: The Group will always strive to work harder,
achieving better performances for the next financial year.
The recent unfortunate natural disasters in Australia, New
Zealand and Japan have reminded us not to take things for granted.
The floods in Brisbane did affect our premises and the
earthquakes in New Zealand and Japan may also potentially impact our
distribution business. Nonetheless, we expect the distribution
segment to continue to be the key contributor for the Group.
In view of the uncertainties and potential risks in the global
economy, we will continue to monitor our businesses closely,
particularly on the risk of rising raw material costs and currency
volatility.
Barring any foreseen circumstances, I am cautiously optimistic of
the Group’s performance in FY2011.
Q : With this set of favourable results in
FY2010, what can the shareholders look forward in terms of
dividends?
A : The Board of Directors has proposed a first and final
dividend of 1.69 cents per share for FY2010 (1.15 cents in FY2009).
The proposed dividend payment of about $9.88 million ($6.72 million
in FY2009) represents about 30% of our net profit after tax. The
payout ratio is the same as FY2009.
Q : The Group is also expected to move back
in the near future to a newly refurbished headquarter in 2 Pandan
Road. Many see this as a sign of a new growth era and exciting times
for the Group. Do you agree?
A : A definite yes! With the new headquarter, it
shows our total commitment to our shareholders, customers, partners,
management team and staff that we are embracing these exciting
challenges and hope that we can be on track for an era of continuous
growth for a long time.
Our results in 2010 were achieved by the concerted hard work and
commitment of all our members in the YHI team. Moving forward, we
have many tasks and challenges ahead of us, especially as we work
towards implementing the Group’s 5-year
expansion plan successfully. With the continued hard work and
commitment put in by the dedicated team at YHI, I am confident that
we will continue to produce good results for 2011 and beyond.
In closing, I would like to take this opportunity to thank our
Board of Directors for their guidance and to express my sincere
appreciation to our employees for their dedication and hard work. To
our stakeholders – our shareholders, customers,
suppliers and business associates - thank you for your unwavering
support and confidence in us. I appeal to you all to continue to
work with us as we build a better future.
I look forward to meeting you all at our coming
shareholders’ meeting.
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