$SKBSHUT / 7115 (SKB SHUTTERS CORPORATION BERHAD) Notes from Archidex KLCC 2024

More and more, I start to take note of industrial exhibitions to see the actual products of the companies rather than relying on just reports and news. As they say, there's really no replacing on grounds scuttlebutt when you're thinking of a long term investment. @penglam and @realalvinang have bene following this company for the longest time; and unfortunately share price had rallied immensely this week already. Nevertheless, I think it's worth reading if you're interested about the company and its products.

Both Michelle and Melissa are working hard at expanding the business after taking over from their Father and Grandfather (Sin Kean Boon, thus SKB); shifting their focus onto more specialized higher margin products and carving a niche for themselves, which seem to be paying off well. I think they are going in the right direction.

For those who want to go, it's not too late to visit the exhibition at KLCC-- I believe tomorrow will be the last day. You can check out products from overseas as well as from other listed companies too.

Anyway, let's get to it:

1. All their products can be made to operate automatically or manually, depends on clients’ requests. Generally, auto is preferred. The shutters can be remote controlled from a central control room. They can also provide a backup power supply for emergency use cases. Nowadays, they mainly supply for industrial use. Very minimal for residential purposes. Their products are in high demand especially for warehouses. Their shutter speeds can be around 5-500mm per second. For the BOMBA test, the speed of opening and closing is very important. Typical lifespan of a roller shutter can be 10-15 years; but if it’s used frequently it can last even longer. Typically, no maintenance is required, however they do provide some maintenance services if customer requests for it. There are no regulations/requirements for replacements of old shutters for now.

2. Typical project lead time involves surveying customers’ sites and planning the design, then the manufacturing and subsequently delivery and installation, takes around 6 weeks. If by tender basis, the process might take a bit longer as customer will take some time to evaluate and pick. Historically they have always met the deadlines and never experienced delays in delivery once the dates have been set. However, lately they are seeing strong demand, and the lead time has been extended slightly to max around 8 weeks.

3. SKB’s insulation shutters are still the market leader in Malaysia, with certifications from local and international bodies. They are not the cheapest, but they are confident in their capabilities thus able to charge higher price and customers are willing to pay.

4. BOMBA has been stricter lately, and all new buildings must meet the Bomba requirements and witness testing. SKB is seeing strong demand for their fire insulated shutters as one of the few Bomba certified products in the market.

5. Powerless Auto Close Flood Shutter was the main highlight of their exhibition. It was invented last year; first ever of its kind made in Asia. Now they are starting to promote it. Seeing good demand as flash flood incidents are getting more widespread. Yes they confirmed IOI Mall Puchong is using it, but didn’t disclose where else the flood shutters are installed at.

6. Their flood shutters passed the SIRIM Malaysia test, which is not easy as it has to meet a lot of criterion including 2400mm height of water volume as well as impact testing, and must be leak proof throughout. It’s not that difficult to retrofit the flood shutters to replace older installations if the client requests for it.

7. Data Centers? Yes they do participate however they do not directly bid for DC projects. They get requested from contractors for quotations or to bid together.

8. Which of their products are being used for DC? A variety, including steel doors, flood shutters, insulated shutters but not so much on the racking. They didn’t disclose % of sales to DC usage.

9. They don’t have to create specific products to cater to DC, because their products are already meeting the spec requirements.

10. Racking Segment: Very well-known and used in Oceania (Australia and NZ). Their racking system is resilient to earthquakes; there was a case where an earthquake happened and their racks didn’t crumble.

11. New plant: Located in Puncak Alam, to replace the old existing KD plant which is over 20 years old. Estimated completion by around end of next year. It is a bigger and more modern plant with better automation capabilities, showroom and display etc.