Swang Chai Chuan (2321) H1 2023 earnings summary

Executive summary

• H1 revenue rose 20.5% YoY to RM481.739m; profit for the period increased to RM16.450m from RM15.999m.

• Third-party brand distribution drove sales growth, while competitive pricing, product-cost inflation and lower-margin new distribution rights pressured margins.

• Excluding listing expenses, H1 2022 profit was RM19.5m versus RM16.5m in H1 2023; no interim dividend was recommended.

Financial highlights

• Revenue was RM481.739m versus RM399.932m; gross profit was RM58.526m versus RM56.943m.

• Profit before tax was RM23.662m versus RM22.630m; profit for the period was RM16.450m versus RM15.999m.

• Basic and diluted EPS fell to 1.64 sen from 2.21 sen as weighted average shares rose to 1,000.150m from 723.000m.

• Other income increased to RM3.407m from RM0.498m, mainly reflecting higher interest income and net exchange gains.

Outlook and guidance

• Priorities include building on industry expertise, exploring business opportunities and controlling costs to improve margins and competitiveness amid inflation.

• Available resources and working capital were expected to fund future working capital, capital expenditure and other cash requirements.

• Unutilized listing proceeds were expected to be deployed by December 2024 for distribution capabilities, own products, e-commerce and strategic investments.