$WELLCAL / 7231 (WELLCALL HOLDINGS BERHAD) - Turnaround for Global Demand for Rubber Hoses in Sight, Local Demand remains Strong

Just a few quick notes from the briefing.

1. Orderbook visibility is still good, with order delivery up till September currently.

2. New line is expected to be completed by the end of the year, and this is expected to increase capacity by around 20% and improve efficiency.

3. There has been some rescheduling of shipments by their customers. Nevertheless, shipping is borne by customers and not by Wellcall so this wouldn't impact their expenses.

4. ASP is stable, while volume had increased slightly. That being said, there are some increments in raw mat (NR and NBR) cost. Will Wellcal raise ASP? Depends, the market is competitive and they need to support their customers as well.

5. Trelleborg JV had been fully impaired already since 2022. Will only produce if they receive profitable orders.

6. Exports had declined but offset by increased demand locally. Seeing some big orders from local players. Various industries. Global competition is increasing. Wellcall is still maintaining their competitive strengths. They are seeing global orders picking up again.

7. Sales are about 50% from O&G sector, with the remainder spread across various other industries. Wellcall distributes to over ~200 different customers who are themselves distributors.

8. FCF still strong, and 2 sen dividend declared. Impressively, net cash continues to maintain at a very high level (and even grew) in spite of their high payouts.

9. Succession plans are in place to train the next generation.

10. Are China's hoses substantially cheaper? Not really comparable, as there are various factors that influence the ASP. For example, physical properties, composition, etc. Customers who left wellcall had also eventually came back due to their competitive strengths.