Success Transformer to grow overseas markets

By GOH EE KOON

PETALING JAYA: Success Transformer Corp Bhd has bright prospects, given its drive to grow its overseas markets and recent acquisition of another factory in Sungei Buloh that spells production expansion plans.

Currently, it exports primarily to the Middle East and South-East Asia, as well as to Africa and Western Europe.

A company spokesman told StarBiz yesterday it was planning to grow its markets in South East Asia and the Middle East this year.

“Opportunities abound in these two regions, especially in the Middle East. We have a presence and enjoy brand recall in the United Arab Emirates but are hoping to branch into Kuwait, Bahrain and Jordan this year, as construction is ongoing and conducted on a large scale in that region,” he added.

At present, Success Transformer exports to 31 countries and has a 100-distributor network. About 19% of its revenue came from exports last year, but the spokesman said the company was hoping to grow that to 30%.

It is banking on the Ninth Malaysia Plan (9MP) to present opportunities to provide lighting for infrastructure projects.

“Even in the past two years when the construction sector slowed down, we continued to grow so we believe there are ample opportunities from the 9MP,” the spokesman said.

While it plans organic expansion, the company recently acquired 60% in machinery and equipment specialist fabricator Seremban Engineering Sdn Bhd, whose products range from unfired pressure vessels to tanks and silos used in the oleochemical, palm oil, oil and gas and biodiesel industries.

A local research house said that with the acquisition, it forecast Success Transformer's revenue for the financial year ending December 2007 to rise by 57%.

The company may also see earnings improve by 36% against last year's net profit. The research house maintained its “buy” call on Success Transformer, pointing to its attractive valuation and sustained estimated earnings growth.

Listed on the second board last January, Success Transformer transferred to the main board yesterday. Its shares closed at 64 sen, shedding 3 sen, or 4.48%.

A total of 1.345 million shares were traded.