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Boon Koon Set To Turn Profitable In FY17
Date: 25-8-2016
By: The Edge Markets, Sangeetha Amarthalingam
Source: http://www.theedgemarkets.com/my/article/boon-koon-set-turn-profitable-fy17

NIBONG TEBAL: After four straight years of losses, Boon Koon Group Bhd expects to return to the black in the financial year ending March 31, 2017 (FY17), on lower impairment losses on inventories and increased demand for its Viflex 2.0 commercial trucks.

“While there will be impairment write-offs, we are certain that we will make enough profit to cover them. Our first-quarter results are showing proof,” its executive chairman Datuk Goh Boon Koon said after the group’s annual general meeting yesterday.

In FY16, Boon Koon saw its net loss widen to RM2.12 million, from RM108,000 in FY15, as revenue fell 11.8% to RM78.58 million, from RM89.05 million.

For the first quarter ended June 30, 2016 (1QFY17), Book Koon posted a net profit of RM300,000, compared to a net loss of RM42,000  in 1QFY16, mainly due to higher demand for its rebuilt commercial vehicles. Revenue rose 66.9% to RM26.55 million, from RM15.9 million.

Goh said the reason for its upbeat mood is in relation to plans to manufacture its own brand name of motorcycles by 1QFY18, and an expected increase in demand of about 20% for its in-house brand Viflex 2.0 trucks that have seen sales of about 400 units this year.

On its motorcycle production, he said, it recently acquired an energy-efficiency vehicle licence from the international trade and industry ministry. With the licence, Goh said, it would be able to produce passenger and commercial vehicles and motorcycles with less carbon emissions.

The group is in discussion with a foreign party for a joint venture (JV) to manufacture the motorcycles in Kota Kinabalu, Sabah,  for local and export markets. Goh said the JV will likely be inked in 4QFY17.

“We are developing the type of motorcycle that should be ready for manufacture in 1QFY18. It would utilise the internal combustion mechanism.

“We plan to manufacture 10,000 below-150cc motorcycles for the local market. The price would be about RM3,500 per unit,” he said.

The motorcycles, which will bear the brand name “BKM” (Boon Koon Motors), are expected to capture the RM35 million market made up of lower-cc motorcyles in Malaysia, where 70% of 500,000 bikes sold annually here are of this category.

Currently, the bikes and Viflex trucks that fall under its commercial vehicle and bodywork segment contribute 10% of its revenue. The Viflex lorries sold for about RM40,000 without “bodyworks” could see a growth of 20% year-on-year due to its rising popularity among small hawker businesses, he said.

“After introducing it in 2014, we see that it is gaining interest among small hawker businesses,” he added.

“We plan to intensify our marketing activities in existing markets, and expand our reach in Sabah and Sarawak with the reactivation of our Kota Kinabalu plant. We will also continue to focus [on] the business in Johor and Sarawak, where demand for these vehicles remains strong,” he said.


Boon Koon To Produce BKM Motorcycles
Date: 25-8-2016
By: The Star, David Tan
Source: http://www.thestar.com.my/business/business-news/2016/08/25/boon-koon-to-produce-bkm-motorcycles/

NIBONG TEBAL: Boon Koon Group Bhd will be ready to manufacture a new range of motorcycles in the second quarter of 2017.

Group executive chairman Datuk Goh Boon Koon said after an AGM that the the group was now in the development and designing stage of the vehicles.

“These motorcycles will have 150 cc engines and will be sold under the BKM brand.

“Of the 500,000 new motorcycles registered in Malaysia yearly, about 70% are motorcycles with 150 cc engines. This is why we want to tap into this market,” he added.

Goh said the group planned to produce 10,000 BKM motorcycles during the first year.

“The 10,000 units is expected to have a market value of RM35mil, based on the selling price of RM3,500 per unit.

“The sales of the vehicles are expected to contribute to the group’s revenue in the 2018 financial year,” he said.

Goh said the group had recently obtained the Energy Efficient Vehicle license, which allowed it to manufacture passenger and commercial vehicles including motorcycles of any engine capacity.

“This enhances our capabilities to face the new challenges of the future,” he added.

In Sabah, the group had recently reactivated a plant with the intention to produce the Viflex mini vans for Sabah and Sarawak.

“The group is also exploring to sell the vans to the Philippines from Sabah. “We have sold since 2014 about 400 Viflex mini vans to small mobile businesses in the domestic market,” Goh added.

Moving forward, he said Boon Koon would continue to focus on its rebuilt commercial vehicle business, particularly in Johor and Sarawak, where the demand remained strong.