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Extracted from Annual Report 2016



2016 was indeed a challenging year for the Malaysian economy. The Malaysian economy registered a slight moderation of growth for the first half of the year (1Q 2016 : 4.2% and 2Q 2016 : 4.0%). The growth was weighed down by the continued decline in net exports and cautious spending by the private sector in view of heightened uncertainties in the global economy. Inflationary pressure was high due to the reduction in electricity tariff rebates in January 2016. The Ringgit faced stronger depreciation pressure against the US dollar due to continued volatility in global crude oil prices and uncertainties surrounding the US monetary policy.

For the second half of the year, the Malaysian economy showed supportive growth with GDP growth at 4.3% and 4.5% for Q3 2016 and Q4 2016 respectively, underpinned by continued expansion in private sector expenditure and additional support from net exports. While the economy expanded, financial market volatility increased due to concerns over global events in the advanced economies, such as policy and political uncertainties following the outcome of the presidential election in the US and Britain’s vote to exit the European Union.

Against this backdrop, the automotive industry felt the inevitable impact of the deteriorating and difficult operating environment. Total Industry Volume (“TIV”) stood at 580,124 units in 2016 as compared to 666,674 units achieved for 2015, representing a significant drop of 13.0%. This was the lowest TIV recorded for the past six consequent years that went below the 600,000 mark.

Amidst such an adverse operating environment, the Group continued to focus on expansion, operational execution and strengthening of research and development abilities.


In 2016, the Group continued to drive value from its core automotive business by investing in new businesses and markets such as Internet of Things (“IoT”) and the formation of a new joint venture in Vietnam. Such measures were accomplished despite ongoing weak customer demand in a subdued Malaysian automotive sector, and ongoing currency volatility.

For the financial year ended 31 December 2016, the Group registered a revenue of RM1,236.6 million and profit before tax of RM83.2 million. The operating performances of the business segments were generally better or marginally lower, except for the Interior & Plastics Division and Indonesia Operations. Nevertheless, the Interior & Plastics Division remained the key contributor to the Group’s bottom line, contributing 43.0% of the Group’s profit before tax. The overseas operations, excluding Indonesia, achieved growth of 4.4% in profit before tax, whilst Indonesia Operations suffered higher losses as new production lines have only recently become operational.

The Group’s financial performances and business segments performance review are further detailed in the “Management Discussion and Analysis” section of the annual report.


The Group continues to view the dividend as the key element of shareholders’ return and hence, the Board declared an interim single tier dividend of 5 sen per ordinary share for the financial year ended 31 December 2016 (2015 : 7.5 sen per ordinary share), which was paid on 29 September 2016. Further, the Board recommends the payment of a single tier final dividend of 10 sen per ordinary share for the financial year ended 31 December 2016 (2015 : 12 sen per ordinary share) for shareholders’ approval at the forthcoming Annual General Meeting.

The aggregated dividend for the year is 15 sen per ordinary share (2015 : 19.5 sen per ordinary share) will result in a total dividend payment of RM29.4 million (2015: RM38.2 million) if the proposed final dividend is approved by the shareholders.


The global economy is expected to remain on a moderate growth path. Downside risks continue to prevail, arising from volatility in commodity prices and uncertainties over the policy and geopolitical development in major developed economies. On the domestic front, the Malaysian economy is expected to remain resilient and is expected to grow by 4.3% in 2017 as forecasted by the World Bank.

Malaysian Automotive Association (“MAA”) has forecasted the TIV for the year 2017 to be 590,000 units, representing 1.7% increase from 2016’s TIV of 580,124 units. We anticipate the outlook for the Group’s business to remain challenging due to consumer sentiment having grown increasingly cautious in Malaysia. However, recent success and growth both regionally and globally provide a counter balance to the prevailing economic conditions in the increasingly competitive Malaysian automotive space. Furthermore, the level of uncertainty and volatility in the already weak Ringgit is expected to continue.

However, with our robust financial position and vast industry experience, we will continue to nurture and grow our businesses in both the domestic and global scene. We are optimistic that our ongoing strategies of product innovation, regional and global expansion, cost containment initiatives and production efficiency improvements will drive future turnover growth and profitability.


This year, we bid farewell to Dato’ Heng Ji Keng who was an Independent Non-Executive Director since 2011. I would like to take this opportunity to express my deepest gratitude to Dato’ Heng Ji Keng for his valuable contributions to the Group, and wish him the best in his future undertakings. At the same time, I warmly welcome Mr. Lee Tatt Boon and Mr. Lee Min On who bring with them a wealth of experience as new Independent Non-Executive Directors of the Company.


On behalf of the Board, I would like to thank our group of exemplary directors who have been instrumental to the Group’s successful and rewarding journey to-date. I would also like to express my heartfelt gratitude to the Management for guiding the Group seamlessly; and all our employees for their dedication and our business partners, suppliers and distributors for their continuous support and loyalty over the years.

On behalf of the Board,

Dato' Tan Heng Chew