YEW LEE 4QFY2023 REMAINS FIRM AMIDST MARKET FLUCTUATIONS

Strong Manufacturing Base Support Group Level Business Amidst Segment Consolidations

KUALA LUMPUR, 23 NOVEMBER 2023 – Yew Lee Pacific Group Berhad (“Yew Lee” or the “Group”), a manufacturer of industrial brushes as well as trading of industrial hardware and machinery parts, today unveiled the Group’s financial results for the fourth quarter ended 31 December 2023 (“4Q FY2023”).

In 4Q FY2023, Yew Lee's strategic management of the two business segments was evident. The manufacturing segment continued to perform strongly, contributing RM3.6 million to the quarter's revenue, up from RM3.3 million in 4Q FY2022. This positive momentum shows the manufacturing arm's resilience and consistent performance amidst the broader challenges within the glove industry.

On the other hand, the trading segment faced fluctuations, largely due to competition within the markets that they operate in and price wars. In response, Yew Lee is taking decisive steps to streamline this segment, focusing on consolidation within the trading segment to enhance its cost efficiency. These adjustments are part of a broader strategy to ensure the trading segment is alignment with the company's efficiency and profitability goals. Overall, Yew Lee reported a revenue of RM4.9 million for 4Q FY2023, a slight decrease from RM5.3 million in the corresponding quarter of the previous year, attributed to variations in sales orders across markets.

The quarter also saw a marginal increase in the loss after tax, reaching RM1.4 million, up from RM1.1 million in 4Q FY2022. This change reflects the impact of current market conditions and the strategic investments made by the company, including the costs associated with setting up a new subsidiary in Thailand.

On a quarter-on-quarter basis, Yew Lee's revenue decreased to RM4.9 million in 4Q FY2023 from RM5.6 million in the previous quarter ended 31 September 2023 (“3Q FY2023”), while the loss after tax widened from RM0.1 million to RM1.4 million. This reflects the impact of reduced sales orders and operational adjustments during the period.

Mr. Ang Lee Leong, Managing Director of Yew Lee, commented, "As we navigate through the current phase, it is important to recognise the impact of broader industry trends on our performance, particularly in the rubber glove sector, which remains a significant contributor to our revenue. The industry has faced challenges due to oversupply and market imbalances following rapid expansions and stockpiling during the pandemic. Despite these hurdles, we are optimistic about the sector's recovery, driven by heightened global hygiene awareness and increasing glove usage.

He added, “To complement our core business and mitigate industry-specific risks, Yew Lee is actively diversifying its portfolio. We're expanding our industrial brush range, introducing customisable options to meet diverse market needs and solidifying our presence in both local and international markets. Additionally, we're broadening our scope in the industrial hardware and machinery parts segment, exploring new opportunities in sectors such as semiconductors, timber, glass, and agriculture. These strategic initiatives are designed to not only strengthen our market position but also reduce our dependency on the rubber glove industry, ensuring a more balanced and resilient business model for Yew Lee."

As at 23 February 2024, the share price of Yew Lee stands at RM 0.39, representing a market capitalisation of RM208 million.