$SKBSHUT / 7115 (SKB SHUTTERS CORPORATION BERHAD) - Starts to appear on mainstream media, and the management believes the growth trajectory can still continue.

SKBSHUT had been covered here in Stockbit since the early days by @Penglam , and I also shared a little bit more about them after their Archidex exhibition recently.

Few days back, the Star BizWeek team had an interview with them with a few interesting points to note of shared by group MD Michelle Sin. If you subscribe to the Star, you can read the article yourself here: https://cutt.ly/kezcnoj6

Let's just go through some main highlights.

1. SKBSHUT's net profit had climbed from RM 5mil in fy21, to RM 9.6m in FY22, and RM 14.9m in FY 23. Even taking out the covid pandemic impact, prepandemic they were only recording around RM 2-3mil of profit, so the growth is very strong indeed. Michelle hinted that the growth is not one-off, but is a result of the company's focus and resetting to improve productivity and efficiencies.

2. They have earmarked RM 100mil for expansion into a new fully automated manufacturing facility, of which ~RM 36 mil was already spent to acquire the 9.8acres land at $ECOWLD / 8206 (ECO WORLD DEVELOPMENT GROUP BERHAD) 's Eco Business Park V in Puncak Alam. Construction of the new plant will start soon and they expect to relocate and go live by end 2025. (Based on their operating cash flow, I believe they won't need to incur any dilution to fund the expansion)

3. Currently, all their machines at their KD plant are running but capacity can be still increased. However, in the next 5 years they expect that the existing plant will be insufficient.

4. As more MNCs come into Malaysia, they require stringent standards for their parts which bodes well for SKBSHUT. For example, data centers require doors that fulfil a range of functions including security, fire resistance, acoustic performance, and so on. On the matter of DC supply chain, SKBSHUT had been supplying their products to DCs since over 10 years ago, long before the current DC craze. With the new DCs coming up, they are indeed seeing rising orders for their products.

5. About half of their sales are to export markets to over 40 countries with ASEAN as its biggest market, and also includes Oceania, Middle East, and India. New markets that are growing include Qatar, Saudi Arabia, and China.

6. Their products are focused more on providing customised solutions and emphasizing quality and meeting international standards, rather than on pricing.

7. SKBSHUT is moving towards higher performance and ESG-based products; last year they launched their powerless flood shutters and this product is seeing a lot of attention from local and international customers, especially due to the unpredictable flooding patterns nowadays.

8. In 2024, their new shutter products are blast resistant shutters, often used in the O&G sector (I heard, but haven't verified, that some refineries are using their blast shutters), and also high impact wind resistant shutters to withstand typhoons and hurricanes.

9. What would SKBSHUT do with the KD land and factory after relocating? No plans yet, for now. Interestingly, the land is held at quite the cheap valuation in the books, last revalued in 2011, and (this is very much speculation) if they decide to sell it.........

10. For now though, SKBSHUT has no plans to diversify and will focus on being a manufacturer.