Fiamma Holdings Bhd’s (Fiamma) announced that it has entered into a Memorandum of Understanding (MOU) with Zhuhai Samyou Environmental Technology Co. Ltd (Samyou) to leverage their respective resources and expertise in establishing a sales entity and a manufacturing entity in Malaysia. We are positive on this long-term strategic cooperation opportunity, as it enables Fiamma to expand its portfolio to include Samyou’s “Vino” brand, which could help increase market share and drive sustainable growth. Pending further development from this MOU, we keep our estimates unchanged for now. We maintain our Neutral call on Fiamma with an unchanged sum-of-parts derived target price at RM1.02.

Samyou is a manufacturer and supplier specializing in heating, ventilation, air conditioning, and control systems (HVAC) for residential, commercial and industrial market. Samyou has extensive experience in global sales of its air conditioning brand, “VINO”. Samyou is a technologically innovative company that provides a full range of air environment solutions.

Salient terms of the MOU. Under the MOU, both parties agree to combine their resources and expertise to establish a sales entity and a manufacturing entity in Malaysia for Samyou’s “VINO” brand HVAC products. The sales entity will focus on promoting and selling “VINO” products in Malaysia, with Fiamma providing market insight, localised marketing strategies, and leveraging its distribution network. Samyou will supply high quality products, ensure it meets local technical and safety standard, and provide offer full production and technical support. The manufacturing entity will oversee HVAC production, with Fiamma ensuring adherence to Malaysian and export regulation. Samyou will contribute production and technical expertise to meet export market standards. 

Source: PublicInvest Research - 4 Oct 2024