MAIN Market-listed tiles manufacturer and information technology company YB Ventures Bhd (formerly Yi-Lai Bhd) expects to reap higher returns from the rolling out of a premium segment vis-à-vis its new flagship Talos Living Tiles range – the first negative ion tiles launched in Malaysia.
The company is witnessing an overwhelming response for this premium product, driven by increasing awareness for health-friendly products among health conscious consumers due to the COVID-19 pandemic, according to its executive director Au Yee Boon.
Such development has enabled YB Ventures to swing back into profitability in its 1Q FY2021 with a net profit of RM732,000 after incurring a net loss of RM3.5 mil in the same period a year ago.
A filing with Bursa Malaysia showed that the turnaround was mainly driven by higher sales volume achieved amid the roll-out of Talos Living Tiles.
“The turnaround in the group’s earnings is mainly due to the group’s shift towards the premium segment with the launching of the Talos Living Tiles,” commented Au.
“If not for adopting a lower standard cost in inventory as part of the group’s restructuring strategy, we would have seen a much higher profit for the quarter.
“We decided to take a hit with the adoption of the lower standard cost in inventory due to our cost-efficient exercise of RM3.9 mil which resulted in lower inventory and reduced profit.”
Au, however, is optimistic that the earnings going forward will benefit from this exercise as the lower inventory cost going forward will help to increase the group’s profit margin.
Au further added that millions of ringgit had been invested in developing and producing its Talos Living Tiles. He is confident that the group will exceed RM30 mil in sales target based on positive feedback from property developers and end-users.
With the group’s revenue growing at a strong double-digit in the 1Q FY2021, Au is confident that YB Ventures would see further profitable conditions given the strong revenue growth.
In its 1Q FY2021, the group’s revenue increased by 31.3% year-on-year (yoy) to RM30.2 mil from RM23 mil posted in the 1Q FY2020. This is in line with the robust demand for its new flagship product from both property developers and end-users.
“The positive feedback from property developers and end-users as well as the increased orders for our flagship product is a testament to the success of our research and marketing strategy,” justified Au.
“Furthermore, due to the COVID-19 pandemic, people are more conscious about the importance of indoor air quality and the importance of tile selection.”
Early this week, Securities Commission (SC) has approved YB Ventures’ proposed issuance of 1.21 billion irredeemable convertible unsecured loan stocks (ICULS) as part of its proposed rights issue exercise.
Based on the subscription price of 4 sen per ICULS, the company is expected to raise RM48.5 mil under the maximum subscription level. Of the potential sum raised, RM45.6 mil has been allocated to upgrade the group’s existing production lines and to construct four new production lines.
At the close of yesterday’s trading, YB Ventures was down 1 sen or 1.75% to 56 sen with 695,200 shares traded, thus valuing the company at RM90 mil. – May 29, 2021
