Ni Hsin Berhad Annual Report 2018

Annual Report 2018 Ni Hsin Resources Berhad (653353-W) 7 Overview of the Group’s Business and Operations Ni Hsin Group is a leading manufacturer of high quality premium stainless steel products in Asia. Our manufacturing and production facilities are located in Seri Kembangan, Selangor. Vision Our Group strives to be the leader in exquisite Stainless Steel Products globally. Principal Activities of our Group Manufacturing of premium stainless steel products: • Premium Stainless Steel Multi-ply Cookware ranging from pressure cookers, woks, pots and sauce pans for household and commercial use on an Original Equipment Manufacturing (“OEM”) or Original Design Manufacturing (“ODM”) basis besides having our own in-house brand of various multi-ply stainless steel cookware products known as Pentoli; • Multi-ply Stainless Steel Clad Metal; • Stainless Steel Convex Mirror; and • Stainless Steel Household Water Filtration Systems. Key Markets Our key markets are as follows: Asia Pacific (exclude Japan) – 41.7%, Japan – 39.6%, USA & Canada – 6.4%, Europe – 12.3% Management Discussion And Analysis Financial Performance Review For the financial year ended 31 December 2018 (“FY2018”), the Group achieved a total revenue of RM33.2 million which was 16.2% lower than the total revenue achieved in FY2017 of RM39.6 million. Lower revenue was recorded in all segments during FY2018 due to the ongoing turbulent global market conditions leading to the cautious spending of consumers and the stiffer competition from overseas rivals. Gross Profit (“GP”) margin achieved during the year decreased by 6.4% compared to the previous year as a result of lower production volume. The Group recorded a Profit Before Taxation (“PBT”) of RM1.77 million in FY2018 against a PBT of RM2.59 million in FY2017. The factors that contributed to the difference in profitability include lower sales and decreased profit margins in all segments of business in FY2018. Profit After Taxation (“PAT”) achieved by the Group was RM2.17 million in FY2018 compared to a PAT of RM2.07 million recorded in FY2017.