Artwrights’ revival

New venture: Yong with some of the company’s products. The onslaught of the Covid-19 pandemic has opened up new opportunities for AHB, namely the design and manufacture of its Covid-19 glass panels and mobile medical hub.

AHB Holdings Bhd, or Artwright Holdings Bhd as it is known before, is one of the older companies listed on Bursa Malaysia and is beginning to see a revival of sorts after falling off the radar of investors.

The premium office furniture expert saw the entry of Tunku Yaacob Khyra, the Negri Sembilan royalty who owns MAA Group Bhd, as a new substantial shareholder on July 27.

Tunku Yaacob acquired 13.69 million shares shares in AHB in a private placement exercise, translating into a 7.22% stake in the company.

While 59-year-old Tunku Yaacob is not known to be a big investor in the stock market, what is interesting is that the value of his investment has increased close to four times since then, in tandem with the rise of AHB’s share price, which closed at 32 sen yesterday.

Based on this price, the stock’s market cap stood at RM75mil.

The development comes at a time when AHB is positioning to grow its order book from new revenue streams.

But what exactly is taking place at AHB and what happened all this while to this company, whose share price had once hit a high of RM20 during its heyday?

Financial-wise, earnings have been weak. For the recent third quarter ended June 30, AHB posted a net loss of RM2.47mil as compared with a RM266,000 profit in the same period a year ago.

CEO and managing director Yong Yoke Keong, who is the son of the founder, explains a brief history of the company and the many ups and downs it has faced since its 1996 listing on the local stock market.

“Soon after our public listing, we expanded aggressively only to be held back by the 1997 Asian Financial Crisis (AFC). Later, we also faced the onslaught of the oil price crash as some of our biggest customers are in that industry. We also entered into a global joint venture that did not pan out the way we wanted it to.

“But the good news is, for the last two years, we have been embarking on a new journey and is poised to see a significant revival, ” Yong tells StarBizWeek. According to Yong, the company is almost debt free and the team, raring to go with the company just having completed a share option scheme to give employees skin in the game.

As for the recent private placement, several other investors took up RM1mil each – bringing the total raised to RM5mil. The company intends to use the proceeds for expansion, capital expenditure for the purchase of tools and moulds for new products, as well as for conducting general improvements on its warehouse and the purchasing of a delivery truck and associated equipment, among others.

AHB’s flagship is its premium furniture brand, Artwright. To complement this, it has a mid-priced brand, SpaceCom that has enabled the company to bid for a wider range of requirements. And in the more recent past, it has tied-up with several international brands, including Italian luxury furniture brand Cappellini, which is described as the “Ferrari” of furniture and interior design.

Since its inception, AHB has made and sold some one million units, making it one of the leading local players in the game. Moving forward, Yong is confident it could sell and install another one million pieces over the next 10 years.

The new lease of life for AHB can be traced back to 2018. Then the company moved its corporate office to NAZA Tower Platinum Park in the Kuala Lumpur City Centre, to create an impressive and well laid out showroom for its products. The showroom displays state-of-the-art furniture the company installs, from chic boardroom tables with adjustable heights to small well-ventilated soundproof cubicles that have become hot-selling items, for its key clients that comprise mostly multinationals and major government-linked companies.

The onslaught of the Covid-19 pandemic, Yong says, has opened up new opportunities for AHB, namely the design and manufacture of its Covid-19 glass panels and mobile medical hub.

“The outbreak has forced us to re-evaluate on the changing customer habits as organisations adapt to comply with new health and safety requirements post-Covid-19, ” Yong says.

“The Covid panels are flexible and can be installed or added onto existing setups in any workplaces.

“As for the mobile medical hub under SpaceCom, it is a new area of expansion for us but within our range of expertise in office furniture, ” Yong, who holds a 17.64% stake in the company, adds.

These hubs can be catered for an isolation ward, Covid-testing room or set up as an office.

According to Yong, the medical hubs are specially designed for infectious diseases and are constructed with negative pressure antivirus HEPA filtration and ventilation systems.

Similar to the company’s sound-pod introductions, the hubs are durable, yet lightweight enough to be dismantled and moved around – a solution that can be used to combat shortages or meet safety requirements following the outbreak of Covid-19, says Yong.

Sound-pods, which are closet-sized cubicles, are solutions for privacy and quiet in an open plan office environment. These pods can serve as a phone booth or a meeting space for a small group of people.

Elsewhere, Yong says the company is also seeing interest returning from Middle East with oil prices having stabilised.

Other overseas markets it has presence in are India; Singapore, Vietnam and Manila in South-East Asia; Europe and Central America.

According to Yong, after the AFC, the company adopted an asset-light business model by outsourcing its manufacturing activities. This has allowed it to ride out the last few months fairly well at a time when many peers were burdened with fixed overheads from manufacturing cost brought on from disruptions in demand.

“We have exercised prudence and largely kept a low profile for many years. But now, we are ready to make a comeback.

“We are currently implementing about RM9mil of sales and pursuing more than RM100mil sales. Hence we feel positive about our sales growth and financial performance for 2021, ” Yong says.

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