UMS-Neiken’s 1Q sales jump, shares soar

by NUR HAZIQAH A MALEK / pic credit: ums-neiken.com

UMS-NEIKEN Group Bhd seems to be another company that is doing well despite the Covid-19 pandemic as sales of its electrical wiring accessories have risen and translated into better profits, thus attracting investor interest.

Its stock price has gained more than 65% over the past two months to historic highs of RM1.53 last week before profit-taking saw it ended the trading week at RM1.42.

The Rawang, Selangor-based electrical wiring accessories and related products maker’s shares have rallied from 86 sen in early April.

The company’s net profit has more than tripled to RM3.51 million for its first quarter ended March 31, 2021 (1Q21), from RM1.14 million for the same period last year.

Its 1Q21 revenue grew 45% year-on-year to RM20 million, mainly due to improving demand, especially in the domestic market despite the Covid-19 pandemic resurgence, its exchange filing noted.

In its 2020 annual report, the company stated it will seek to fill its backlog of orders this year after a difficult 2020 when its sales to its foreign markets were poor due to the pandemic.

The company has cash and cash equivalents at the end of the quarter amounting to RM17.65 million.

“The group remains vigilant and cautious for the performance for the remaining period of 2021 as the uncertainty and impact of the pandemic may persist until herd immunity is achieved.

“Malaysia’s path to full recovery remains uneven and fragile depending much on the success and speed of the country’s vaccination programme and the global outlook,” it said in a recent bourse filing.

UMS-Neiken is an investment holding company that is engaged in the designing, manufacturing and trading of electrical wiring accessories, lamps and fitting products and related electrical products.

The group also engages in sales and services of electrical home appliances, marketing and trading in lamps and fitting products.

Incorporated in 2004, UMS-Neiken is an original equipment manufacturer and original brand manufacturer (OBM).

The group’s OBM products carry the UMS and Neiken labels, and cater to industrial, residential and commercial sectors.

The UMS product range is sold in Malaysia and 26 other countries worldwide, including countries in the Middle East and Africa, Brunei and Singapore.

The bulk of sales are in Malaysia. In contrast, the Neiken product range is sold mainly in the overseas markets.

The group has subsidiaries in Malaysia, including United MS Electrical Mfg (M) Sdn Bhd, UMS-Neiken (M) Sdn Bhd and UMS-Neiken Industry Sdn Bhd, while units abroad include Neiken Switchgear (VN) Co Ltd in Vietnam, Neiken Electric (S) Pte Ltd in Singapore and UMS Neiken Manufacturing Indonesia PT in Indonesia.

Shareholders had approved the resolution to re-elect Amirul Azhar Baharom and Cheng Siow Chun, who retired by rotation in accordance with the company’s constitution, as the independent non-executive chairman and independent non-ED respectively during the company’s 17th AGM on May 27.

Shareholders also voted for the approval of payment of directors’ fees worth RM108,500 for the financial year ending Dec 31, 2021, and directors’ remuneration (excluding directors’ fee) payable to the directors of the company and subsidiaries amounting to RM15,000 for the financial period from May 27, 2021, until the next AGM.

They also passed the resolution to re-appoint Messrs Crowe Malaysia PLT as the company’s auditors and to authorise the directors to their remuneration.