AI expansion in supply chain advisory to steer HB Global’s return to the black

HB Global Ltd foresees a turnaround in fortune as it leverages its proprietary artificial intelligence (AI) solutions for expansion into supply chain advisory businesses and standard operating procedures (SOPs) management services.

The emergence of new executive director Lee Ping Wei will spearhead the group’s direction into the supply-chain related services and SOP management services.

With a strong track record of more than 10 years in managing and completing billions worth of highly claimed projects in China, Hong Kong and Malaysia, Lee is tasked with a job to turnaround the ailing company.

HB Global (previously Sozo Global Bhd) is a gourmet convenient food producer that specialises in frozen vegetables and ready-to-serve duck meat products.

“We are excited with our expansion into the supply chain advisory business,” Lee told FocusM.

Lee Ping Wei

“Supply chain management has always been a core aspect for the food & beverage (F&B) industry given the short lifespan of our products. This has helped us to develop our own proprietary-AI algorithm solutions to optimise the supply chain management process.”

Following the COVID-19 pandemic, the supply chain management process has become even more important for a lot of businesses as inventory level has to be kept at an optimum level.

According to Lee, the group’s supply chain advisory solutions provide real-time intelligence and actionable recommendations to reduce disruption in the supply chain process.

This is done via real-time tracking technology and applying the Lead Six Sigma principles in the group’s AI-algorithm.

“Our solutions could help companies to optimise their overall cost operations by at least 8-10%. Inventory costs alone could save by as much as 50% by using our SOP management solutions,” Lee added.

Earnings turnaround

While the group has fallen into sharp losses of RM27.7 mil in its FY2020, Lee is optimistic that HB Global is set for a strong recovery in FY2021, led by double-digit growth in its supply chain advisory and SOP management business.

“We are anticipating strong demand for our supply chain advisory and SOP management services given the importance of supply chain management,” he projected.

“The inquiries with regard to our solutions are much higher than our initial expectations, an indication that supply chain management is becoming more important in the post-COVID world,” noted Lee.

He is confident that efforts taken to develop the company’s AI solutions in 2020 during the movement control order (MCO) period will bear fruits as more clients tap onto the solutions offered by HB Global.

White knight for struggling businesses

Moving forward, HB Global could also act as white knight for businesses that are struggling amid the COVID-19 pandemic.

For FY2021, the group targets to invest about RM20 mil in companies that are deemed to have strong growth potential.

According to Lee, the supply chain solutions offered by HB Global will help turnaround some of the struggling businesses during the post-pandemic period.

“Our solutions are capable to improve their operation process,” envisaged Lee.

“Our application of the Lean Six Sigma principles is able to cut down excessive costs and improve business performance. For clients that are struggling with cash flow issues, we will also consider investing into their businesses to tap the long-term recurring income potential.”

In this regard, the group is eyeing business-to-consumer (B2C) and business -to-business-to-consumer (B2B2C) models that could provide recurring income for HB Global.

For example, reflexology-related businesses that were affected by the imposition of lockdowns to contain the spread of COVID-19 have seen a slow recovery despite the re-opening of the economy.

The group aspires to transform such businesses into a total wellness centre concept by offering various types of products and services to potential customers.

“By investing into some of these strong growth potential companies that are struggling with cash flow, we offer them turnaround opportunities with our solutions as well as our investment,” enthused Lee.

“We believe this will enable us to grow our earnings in the long term as the global economy gradually recovers.”

At today’s closing, HB Global was down 0.5 sen or 1.75% to 28 sen with 16.79 million shares traded, thus valuing the company at RM157 mil. – April 22, 2021

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