Topmix targets sustained growth

A LITTLE over a year after its listing on the ACE Market, Topmix Bhd appears confident in sustaining its growth trajectory.

The decorative surface designer with a market capitalisation of RM151.6mil aims for double-digit growth in its financial year ending Dec 31, 2025 (FY25) on projected strong demand for its products and services at home.

The company recently branched out to Thailand through 35%-owned Favor Topmix (Thailand) Co Ltd, where it is experiencing rapid growth.

Its main product is the high-pressure laminate (HPL), or known as “Formica” in Malaysia, a material that is used for kitchen countertops at home to commercial wall panels for aesthetic purposes in property or interior design projects.

“We are still targeting double-digit growth for 2025, and this builds upon the strong momentum last year.

“It will be driven by product diversification and geographical expansion.

“Also, we would like to scale up the melamine-faced chipboard (MFC), a more cost-effective option which complements the HPL segment,” its managing director Jack Teo (picture) tells StarBiz 7.

Organic growth

In its recent first quarter ended March 31, Topmix’s net profit for the quarter more than doubles to RM3.06mil from RM1.27mil in the same quarter a year ago as revenues rise by 14% year-on-year to RM22.07mil.

In FY24, the company reported a net profit of RM11.57mil and revenues of RM92.93mil.

Meanwhile, Topmix’s HPL segment continues to see good organic growth and it will soon launch a new catalogue with new designs later this month.

“This will help us drive sales as we keep pace with the fast-changing interior design trends.

“We usually experience stronger seasonal demand in the second half of the year,” Teo says.

The company launches new design catalogues every two years and Teo says that based on historical trends, sales usually see a strong increase in the second year after these designs are out.

“For example, after we launch soon, revenue growth will be smaller this year but still in double digits: 10% to 15% growth which we target.

“But in the second year, more sales are anticipated and we target up to 35% revenue growth next year,” Teo says.

In Thailand, its associate company allows it to penetrate the market there more efficiently, with the presence of a local partner.

“We see strong demand here for our HPL products and we can leverage our joint venture partner’s strong distribution network there. Topmix Thailand’s operations started last September.

Sales have increased sharply.

“While volumes are not big, revenue has been increasing every month,” Teo says.

While the company owns only 35% of the operations in Thailand, Teo says there is an agreement whereby Topmix will be the sole supplier for Topmix Thailand.

The company has three warehouses in Malaysia – Subang, Selangor; Penang and Johor.

“We have increased our warehouse capacity in Subang by about 76% to accommodate a wider range of product lines and to meet anticipated rising demand.

“Penang’s newly opened sales office and warehouse will enhance our coverage in the north. This will set a strong foundation to cater for the export market,” he says.

Asset light

Topmix employs an asset-light model in its business operations, whereby it does not own the manufacturing facilities but performs the tasks of marketing and designing its products.

Teo says an asset-light model allows the company to be agile and flexible since it outsources the manufacturing to other parties. “We are like Nike or Adidas and outsource to our trusted original equipment manufacturers.

“It allows us to focus on sales, marketing and brand building rather than spreading our resources in capital-intensive manufacturing operations.

“We have a 35% market share in the HPL segment,” he adds.

“We don’t have plans for full-scale manufacturing but we have a light assembly facility for MFC.

“Gradually, we will ramp up operations here.”

According to Teo, the company is planning to launch its own Topmix-branded components offering products such as door handles and kitchen cabinet handles.

This will be done through an asset-light operation with an initial RM3mil expenditure.

“For full-scale manufacturing, we recognise that countries such as China or South Korea have a long-established advantage, including economies of scale with their more mature products and ecosystem.

“Due to this, we would rather outsource this part of the work to them,” Teo says.