KUALA LUMPUR (Aug 5): Unique Fire Holdings Bhd said there is pent-up demand for fire protection systems, equipment and accessories as many construction and development projects have accelerated and need to be delivered after the Covid-19 pandemic subsides.
Its chief executive, Datuk Marcus Liew, said Unique Fire is confident of positive growth for fiscal year 2023 (FY23), saying its database includes being the sole supplier of tunnel stations in the line 1 of Mass Rapid Transit (MRT) as well as vehicles in the logistics side.
The company is also trying to get its fire extinguishers certified to British standards as it plans to export to Hong Kong, the Middle East and other Commonwealth countries, Liew told a news conference after the debut. of Unique Fire at ACE Market in Bursa Malaysia on Friday (August 5th).
Unique Fire shares opened 19.23% or five sen lower at 21 sen from its initial public offering (IPO) price of 26 sen. By the midday break, stocks cut some losses to 23 sen. It saw around 73.17 million shares traded in the hands.
Through the IPO, the company expected to raise RM21.78 million through the listing exercise. It has earmarked RM6 million of the proceeds for expanding its geographical coverage – a new sales office with warehouse in Penang and Johor respectively – and RM2.5 million for expanding its manufacturing facilities.
An additional RM5.3 million will be set aside for expanding its operational capacity, RM4.58 million for working capital, while the remaining RM3.4 million will be used to fund registration expenses.
“Currently we only have one manufacturing line and the capacity is now around 85%. With two new lines added, we believe we can generate an additional 470,000 extinguishers per year,” Liew said.
He also said that Unique Fire is still looking for a suitable location for its new warehouses. In Johor, the company leans towards the heart of the city where there is accessibility and connectivity to the highway. In Penang, the company envisions industrial zones where most foreign direct investment is potentially located.
“We believe that with our presence in Penang or Johor, we will be more localized. We understand that there are also small traders in these two respective regions and we hope that we will capture the market,” he said.
Currently, Unique Fire’s main market (97%) is in Malaysia, where the highest revenues come from the Klang Valley, followed by Penang.
“Our foreign market is relatively small, around 2-3% only. We plan to push it 3% to 5% more per year,” Liew said.
According to its fact sheet, the export market to which Unique Fire supplied included Vietnam, Cambodia and Brunei. Liew said these markets accept its SIRIM-certified fire extinguishers.
“Our overseas trade is collected in US dollars, so it is in our favor at the moment,” he added.
Unique Fire reported a net profit of RM1.23 million for its fourth quarter ended March 31, 2022 on revenue of RM21.87 million, according to its filing on Wednesday August 3.
For the full financial year ended 31 March 2022, it recorded net profit of RM5.64 million and revenue of RM75.74 million.
Liew said Unique Fire is the third largest company in the Malaysian fire protection industry by revenue.
“Throughout the 25 years of the company’s existence, we have focused solely on fire protection equipment without participating in any tendering or servicing and maintenance, so most of our customers have been with us for over 20 years or about 10 to 15 years…that’s our main strength,” he said.
In terms of pricing for its products, Liew said increases have been implemented as the price of steel rises. Steel is the main raw material (30%) used for the manufacture of fire extinguishers.
“Since the increase in the price of steel, we have been practicing a monthly pricing strategy. Thus, we will review our prices on a daily basis and price our products on a monthly basis. But the price of steel has become a bit more stable and is also falling,” he said.
Notably, the company has a current ratio of 4.16 times according to its balance sheet as of March 31, 2022, compared to 3.42 times during FY21.
Liew said Unique Fire is keeping inventory high, especially during the pandemic, due to the supply chain issue.
“It’s also one of our attractions for customers, because they see our warehouse as their store. So they don’t need to have a big store or a warehouse when it comes to fire protection equipment,” he said.