KUALA LUMPUR (Dec 9): Kein Hing International Bhd saw its net profit fall 40.3% to RM1.82 million or 1.84 sen a share in its second quarter ended Oct 31, 2016 (2QFY17) from RM3.05 million or 3.08 sen a share a year ago, due to lower sales and also the initial set up costs of a new factory in Vietnam.

Its revenue decreased 3.92% to RM57 million in 2QFY17 from RM59.33 million a year ago.

In a filing with Bursa Malaysia today, it said the decrease was mainly due to the drop in sales of tooling despite growth in sales of parts for the TV and automotive industries.

For the cumulative six-month period ended Oct 31, 2016 (1HFY17), its net profit dropped 32.71% to RM3.47 million or 3.51 sen per share, against RM5.16 million or 5.21 sen per share in the same period of FY16. Revenue was up by 1.88% to RM111.4 million compared with RM109.34 million a year earlier.

“The decrease in profit before tax (PBT) [for 1HFY17] by RM3.3 million or -34% was mainly due to the initial costs incurred by a new factory in Vietnam as it is still under the gestation period and also the higher foreign exchange gain recognized in the corresponding period last year,” it said.

Going forward, the board of directors expects that the group will achieve a satisfactory result for the financial year ended April 30, 2017 despite expecting its group revenue to encounter some fluctuation due to less predictable customers’ demand.

Shares in Kein Hing closed up 1.5 sen or 2.04% at 75 sen for a market capitalisation of RM72.77 million.