Hing Yiap Knitting ... Mar 09

Apparel maker and retailer Hing Yiap Knitting Industries Bhd is prepared to absorb losses during the current economic downturn to promote the growth of its lesser known brands.

It wants to grow its Theobroma Chocolate Lounge and Unionbay in this recession. It may need to suffer losses for a couple of years.

The group has five apparel brands under its belt, namely Antioni, Bontton, B.U.M. Equipment, Diesel and Unionbay.

The group had plans to expand its children segment and move into fashion accessories and bags as these had high growth opportunities.

Majority of its customers are Malays and they are the key driver of the retail sector. Despite a softening in the general demand, its market is still consistent.

The company also invested into a chocolate cafe business last July 2008. There are currently four Theobroma Chocolate Lounge outlets in 1 Utama, Pavilion KL, Bangsar Village Shopping Centre in the Klang Valley and the low-cost carrier terminal (LCCT).

It does not just see itself as a textile company anymore. They want to expand into the total lifestyle of young people. And there is a niche market in this as the chocolate lounge is a new concept here and it is a good component of a lifestyle company.

It hoped to see its food and beverages (F&B) arm contribute about 15% to the group’s revenue in five years’ time.

Financial Results … For its second quarter ended Dec 31, 2008 Hing Yiap’s net profit fell 34.6% to RM2.9 million from RM4.4 million the previous year as the Hari Raya seasonal buying was early last year and most of the sales were captured in the first quarter. Revenue for the quarter dropped to RM34.3 million from RM42 million.

However, it recorded higher net profit and revenue for its six months with net profit increasing 23.4% to RM9.2 million and revenue rising 4.2% to RM81.9 million.