Yee Lee banking on Red Bull power to boost earnings

KUALA LUMPUR: Yee Lee Corp Bhd is banking on Red Bull to power up its earnings growth.

The company had already invested RM2mil to boost its sales and distribution network after securing the exclusive rights to distribute Red Bull energy drinks in the country.

The fast moving consumer goods distributor will invest a further RM5mil to RM10mil over the next three years via various marketing initiatives to promote the product.

“We are looking to sell five million cases, that’s 120 million cans, this year,” Yee Lee group chief executive officer Lim Ee Young told reporters at a press briefing yesterday.

“The addition of the Red Bull would help us match last year’s revenue figures,” he said.

In April, the company had inked a five-year distribution partnership agreement with Allexcel Trading Sdn Bhd.

The agreement allows it to exclusively market, distribute and sell the latter’s products, including the well-known Red Bull energy drinks.

The deal was done through its wholly owned subsidiary, Yee Lee Marketing Sdn Bhd, giving Yee Lee the distributorship of a variety of consumables including Red Bull Gold, Red Bull Less Sugar and Red Bull Bottle energy drinks

Meanwhile, the energy drink brand is owned and founded by TC Pharmaceutical Industries Co Ltd, and has a market share of some 55% in the energy drinks segment in Malaysia.

“We have been investing a lot into technology so as to keep exploring ways to reach our customers,” Lim said.

“We have also set up a special team specifically charged over the beverage lines so as to improve sales and service customers better.

“There is great room for growth in Malaysia.”

TC Pharmaceutical chief executive officer Saravoot Yoovidhya, who is also the son of the company’s founder, said Thailand, for instance, has energy drinks as household items and was priced low due to market competition.

“We must try harder to bring up the consumption of this energy drink per capita in Malaysia,” Allexcel Trading Sdn Bhd general manager Charles Wong said.

“As 2016 will be a more challenging year, we will figure out how to go about the sales.

“Meanwhile, our business plans are being finalised, as are our growth plans for 2016,” he said, adding that plans for Red Bull to be a more dominant player in the local market were underway.

For the second quarter ended June 30, 2015, Yee Lee posted a net profit of RM5.1mil, 30% lower than the RM7.3mil in the same period last year.

Revenue came in at RM185mil, 4.5% higher than RM177mil last year.

The company had also paid out a first and final dividend of 3 sen per share under the single tier system for the year ended December 31, 2014,

Yesterday, shares of Yee Lee closed up 8 sen on the day’s high of RM1.77, inching up from a six-month low of RM1.44 in late August.