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YHI Int'l reports 8% earnings rise
YHI Int'l reports 8% earnings rise

(2007-02-24)

By SAMUEL EE

YHI INTERNATIONAL'S net profit for the full year ended Dec 31, 2006, rose 8 per cent to $27.5 million, thanks mainly to continued growth in its alloy wheel manufacturing business.

Turnover climbed 12 per cent to a record $375.2 million.

In addition to designing and making alloy wheels in China, Taiwan and Malaysia, YHI is also a distributor of automotive and industrial products such as Yokohama tyres, and Enkei and OZ rims.

The distribution business, from which $263.6 million or 70 per cent of total revenue was derived, benefited from stronger sales in Asean and Oceania.

The manufacturing segment, which made up the remaining 30 per cent of turnover, got a boost from three new production lines in Suzhou. The output from these three lines, which began operating in September, contributed 20 per cent of the 1.2 million wheels produced last year from a total of 11 lines.

Earnings per share rose to 4.71 cents from 4.36 cents previously, while net asset value per share increased to 25.32 cents from 22.22 cents. The group has announced a first and final tax-exempt dividend of 1.2 cents per share, compared with the preceding year's one cent.

'We are delighted to achieve another year of growth in both top and bottomlines despite rising material costs and competitive pressures,' said group managing director Richard Tay, referring to the soaring cost of aluminium used in making alloy wheels and stiff competition from Chinese wheel manufacturers.

Mr Tay said the price of aluminium ingots surged 40 per cent last year to a 'ridiculous' US$2,800 per tonne - the highest in 20 years. But he says prices have since stabilised.

'Aluminium prices peaked in 2006, so we are confident they will be further lowered to more reasonable levels this year,' Mr Tay said.

Mr Tay added that YHI will concentrate further on manufacturing and is targeting a 50:50 contribution in turnover from that and the distribution business by end-2008.

'The distribution business will continue to see organic growth because you are restricted to a certain area when you represent other people's products,' he said.

But manufacturing has better margins and scaleability and to exploit that, YHI will continue to expand production capacity and its sales network.

This year, to complement its Shanghai HQ, the group will establish a branch office in Guangzhou, the capital city of China's richest province, Guangdong. Distribution subsidiaries in Canada and Dubai are also in the pipeline.

'The target is to increase our markets from 52 to 70 countries. We must go into every continent,' said Mr Tay.

《The Business Times》


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