PETALING JAYA: Mould-maker MQ Technology Bhd (MQ Tech) expects the outlook for the hard disk drive and precision part markets to remain positive, on the back of favourable global growth.
MQ Tech said the growth in these two markets will contribute significantly to its precision tooling, automation and rapid tooling divisions.
“We are positive on the outlook as the demand is driven by ongoing megatrends and our massive efforts to strengthen and enhance our position in target markets,” said the company in its latest annual report, which was released last month.
MQ Tech said it projects the manufacturing sector to further rebound in 2023, on the back of steady improvement in the market as global economies are recovering from the Covid-19 pandemic.
“The group continually focuses on quality control and operational efficiency to lower costs and sustain growth momentum.
“The group remains concentrated on high-precision tooling and automation, in addition to our venture into the theme park and property development sector.”
MQ Tech said it will constantly review and assess the viability of the new business upon fulfillment of unprecedented conditions.
“We will also continue to focus on attractive end markets where our technology and services can create long-term value for our customers; and where the group sees growth potential and attractive opportunities.”
Citing market research, MQ Tech said the global hard disc drive market size was estimated at US$39.96mil (RM170mil) in 2022 and is expected to grow at a compounded annual growth rate (CAGR) of 6.87% by 2027 to reach US$56.35mil (RM240mil).
“According to Research Nester, the global precision parts market is estimated to garner a revenue of US$268.3bil (RM1.15 trillion) by the end of 2025 by growing at a CAGR of 8.19% over the forecast period (2021 to 2025).”
Barring unforeseen circumstances, MQ Tech said it is cautiously optimistic about improving its financial performance.
Last month, MQ Tech announced that it is acquiring a piece of 7.16-acre land in Klebang, Melaka for RM19.5mil.
It said the proposed acquisition was an integral part of its plan to diversify into the property business.
MQ Tech said it had seen increasing challenges in its manufacturing business, including intensifying competition which resulted in the group registering losses in the recent few financial years.
“Although the group has recorded profitability based on the unaudited consolidated financial statements for the fiscal year ended Sept 30, 2022, which was mainly due to higher revenue recorded during the financial period under review from the business of manufacturing, we intend to mitigate our reliance on our sole business of manufacturing by diversifying its business to include property, through the proposed acquisition.”
Upon completion of the proposed acquisition, MQ Tech intends to develop two blocks of 27-storey serviced suites, housing a total of 1,000 residential suites and 80 shop lots each.
The company is aiming to complete the acquisition in the third quarter of 2023, pending approval from its shareholders.
While the exact gross development value (GDV) and gross development cost (GDC) of the proposed project could not be calculated at this juncture, MQ Tech nonetheless estimates the GDC to be RM200mil and the GDV is approximated at RM275mil, which would give the company a gross development profit of RM75mil.