Wellspire expects recovery of Thai economy to spur its future earnings

ACE Market-listed Wellspire Holdings Bhd, a distributor of consumer-packaged foods and an online retailer of consumer-packaged foods in Thailand, expects demand for healthy snacks like sunflower seeds and nut products to rise amid the recovery of Thai household income and consumer spending in the post pandemic phase.

According to the Office of National Economic and Social Development Council of Thailand, the Thai economy in 2023 is expected to expand within the range of 3% to 4%, mainly supported by the recovery of domestic tourism, expansion of both private and public investments, improved domestic demand and growth in the agricultural sector.

“With the positive impacts on the general economy being catalysed by border re-openings and the sustained relaxation and removal of COVID-19 measures, a healthy pathway to recovery of the revenue figures is anticipated,” projected Wellspire CEO and executive director Mo Guopiao in a results review.

“Based on the improving operating landscape, Wellspire is in a good position to continue to achieve satisfactory financial results in the coming quarters.”

Mo Guopiao

The group which debuted on Bursa Malaysia on Jan 16 posted a net loss of RM896,000 on the back of a revenue of RM32.58 mil for its 4Q FY2022 ended Dec 31, 2022.

Its adjusted net profit for the quarter was RM494,000 after taking into account one-off listing expenses of RM1.39 mil. There are no comparative figures for the preceding year corresponding quarter available as no interim financial report is prepared for the comparative financial period concerned.

On a cumulative perspective, the company registered revenue of RM123.37 mil (FY2021: RM136.7 mil) and a net profit of RM1.14 mil (FY2021: RM11.12 mil) for its FY2022. The decline in revenue and earnings year-on-year (yoy) was due to the impact of the global COVID-19 pandemic on the snack food industry.

As part of the group’s future-forward corporate strategies, Mo said Wellspire intends to acquire or construct a warehouse and operating facility to increase its asset base.

“Concurrently, the group also plans to expand its range of products to include other types of snack foods by leveraging its market access to a large potential end-consumer base in Thailand,” he envisages.

“In the e-commerce space, Wellspire aims to strengthen the features of its existing platform operated by its subsidiary, Keymall Retail, to further complement its existing business model and to increase its online presence.”

At 3.31pm, Wellspire was down 1 sen or 2.7% to 36 sen with 2.44 million shares traded, thus valuing the company at RM256 mil. – Feb 24, 2023

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