Chin Hin's 1Q net profit grows 73% to RM26m amid gain on disposal of Solarvest shares

KUALA LUMPUR (May 25): Chin Hin Group Bhd registered a 73.25% growth in net profit for the first quarter ended March 31, 2022 (1QFY22) to RM26.26 million from RM15.16 million a year earlier due to a gain on disposal of Solarvest Holdings Bhd shares, as well as share of results of associates and joint-venture companies.

The company’s quarterly revenue increased by 13.98% year-on-year to RM350.95 million from RM307.91 million, driven by higher revenue from its distribution of building materials sector and manufacturing of wire mesh segment.

It also announced a first interim dividend of one sen per share, payable on July 5.

“Other operating income increased by RM20.17 million or 239.55% from RM8.42 million for the preceding year's corresponding quarter to RM28.59 million for the current quarter. The other operating income mainly consisted of the gain on disposal of Solarvest’s ordinary shares totalling RM23.59 million in the current quarter as compared to a gain on disposal of Solarvest warrants which amounted to RM7.22 million in the preceding year's corresponding quarter. The remaining increase in other operating income was mainly contributed by Kayangan Kemas Sdn Bhd, one of the subsidiary companies of Chin Hin Group Property Bhd,” the group said.

Share of profit from Chin Hin’s associate companies increased by RM2.92 million or 106.57% primarily due to the share of results of RM2.29 million from Stellar 8 Sdn Bhd, an associate of Chin Hin Group Property. “The balance of the growth in earnings was contributed by Signature International Bhd’s home living solutions business segment.

“Share of results of joint venture R Synergy Sdn Bhd of RM290,000 for the current quarter was solely derived from profit recognised from the construction of the Miri Hospital annex building, Sarawak (design and build),” Chin Hin added.

Moving forward, the company expects the operating environment to still be challenging in FY22 but at a much “manageable level since the government has eased the community and border measures”.

“However, due to the building materials cost index continuing to rise, it has posed great challenges to our manufacturing sector, coupled with weakening in the ringgit against the US dollar. The group will reposition itself to cope with the challenges and remain vigilant for new prospects,” Chin Hin explained.

Chin Hin shares were traded down 10 sen or 2.54% at RM3.83 at the time of writing on Wednesday (May 25), valuing the group at RM3.39 billion.

Edited by Joyce Goh

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