E-commerce and foodware businesses to boost Asia File earnings

GEORGE TOWN: Asia File Corp Bhd expects its e-commerce and foodware businesses to generate between 20% and 30% of the group’s bottom line within the next two to three years.

According to group executive chairman Datuk Lim Soon Huat, the foodware business has created a stable income base for Asia File’s expansion.

He told Starbiz after the company’s recent AGM that Asia File has started selling its filing and stationery products through e-commerce platforms in the UK and Europe.

Lim added that intense competition among the existing players would continue to exert pricing pressure and impact profit margins.

To stay afloat under such circumstances, he said the group would continue to drive cost-control measures, as well as realign itself with its customers.

“We are restrategising by tapping into the vast potential of e-commerce.

“Leveraging on the opportunities offered by e-commerce helps spur our growth in the market.

“It will also help the group to engage more effectively with customers.

“To better position us as a one-stop filing product supplier, we will add new products as well as enhance the features and functions of the existing range,” Lim added.

As of March 31, 2019, the group’s cash and cash equivalents amounted to Rm177.3mil, while bank borrowings were recorded at Rm27.6mil.

The group’s financial position remains healthy with a total of Rm598.9mil in equity attributable to owners.

He pointed out that “the healthy balance sheet position with strong cash flow will enable the group to seize any good opportunity for any potential acquisitions which will provide it with business synergistic benefits.

“The operating environment is expected to remain challenging, going forward.

“The group will continue to focus on strengthening its competitive advantage by putting in place a leaner and more efficient manufacturing process, adopting customer-focused marketing strategies, including digital marketing, and offering quality products to its customers,” Lim added.

As more than 87% of the group’s revenue is invoiced in foreign currencies, Lim noted that the foreign-exchange (forex) volatilities associated with the pound sterling, euro and US dollar against the ringgit would impact the consolidated earnings of the group.

The group will also continue to monitor closely the movement of the forex rates and adopt hedging strategies, where appropriate, to address the risk of major fluctuations in the exchange rates.

Furthermore, to ensure sustainable growth, Lim said the group would be on a continuous lookout for new ventures whether within or outside its core business.

“This will no doubt create uncertainties as new areas are being explored and tested,” he added.

Lim said the group’s foray into new investments would pose both challenges and opportunities.

To minimise any potential losses from such new ventures, the group would carry out proper due diligence processes and in-depth evaluations prior to making any new investment decisions, Lim added.

At the recent AGM, shareholders approved a single-tier dividend of RM0.07 per share for the 2019 financial year to be paid out on Oct 31, 2019.

Asia File closed up 3 sen to RM2.45 last

Friday.