PETALING JAYA: The strength of the US dollar against the ringgit will be key to the fortunes of loss-making furniture maker Synergy House Bhd
moving into the financial year 2027 (FY27).
BIMB Research estimated the company to post a net loss of RM7.3mil in FY26 ending December but achieve a gradual earnings turnaround and deliver a net profit of RM0.6mil in FY27 and RM6.2mil in FY28, with foreign-exchange fluctuations serving as a major earnings swing factor due to Synergy House’s export-led business model, much of which is priced in the greenback.
Some 80% to 85% of its total revenue is dollar denominated, whereas about 30% of costs are dollar-linked (primarily covering freight, storage, and advertising).
As its finished goods are predominantly procured in ringgit, Synergy stands to benefit from a stronger US dollar against the local unit.
“At our base case of RM4.10/US dollar and FY27 gross margin of 26.5%, we forecast profit after tax (PAT) of RM0.6mil.
“Holding margins constant, PAT could rise to RM6.5mil at RM4.30/US dollar and RM12.4mil at RM4.50/US dollar.
“Conversely, further ringgit appreciation would materially raise the margin hurdle required for Synergy to remain profitable,” the research house stated in a report on the company.
Synergy is a cross‑border eCommerce seller and exporter specialising in ready‑ to‑assemble (RTA) home furniture.
It operates through both business-to-business (B2B) and business-to-consumer (B2C) channels.
Under its B2B model, the company supplies RTA furniture to online retailers, chain‑store retailers, and wholesalers.
Its B2C model focuses on direct sales to international consumers via its in‑house online store and third‑party platforms, including Wayfair US/UK, Amazon US/UK, Cenports, Mano Mano and eBay. Its product portfolio covers bedroom, living room and dining room furniture.
BIMB Research has revised up its end-2026 US dollar ringgit exchange rate forecast to RM4.10 from RM3.90 previously.
It added foreign-exchange alone is not the sole determinant for Synergy’s financial recovery.
It noted Synergy topline recovery depends on the normalisation of direct-to-consumer sales volume, particularly across key export destinations in the United States and United Kingdom.
The 26.5% gross margin target in FY27 requires lower storage costs, inventory optimisation, and an improving product mix.
It added Synergy’s selective price increases introduced since August serve as a buffer against ongoing tariff and foreign exchange pressures.
While a stable exchange rate improves visibility, Synergy’s recovery will depend on stronger sales execution and continued margin discipline.
Backed by the exchange rate tailwind, BIMB Research maintained its “hold” recommendation on Synergy with an unchanged target price of 19 sen a share.
The research hosue remained cautious, as the sustainability of the recovery will ultimately depend on stronger sales execution and continued margin improvement.
For its second quarter ended June 30, 2026, Synergy’s net profit dropped to RM717,000 from RM1mil in the previous corresponding period,
Revenue dropped to RM36.15mil from RM68.96mil a year earlier.
In a note following its second quarter earnings, the company said the operating environment remains challenging in the near term, driven by macroeconomic uncertainties, evolving trade policies and cautious consumer spending across key markets.
