Company Background

A rising player in the aluminium industry. The Winstar Group is involved in the midstream and downstream segments of the aluminium industry value chain where the Group converts aluminium billets into primary aluminium products, namely extruded aluminium profiles. The Group is also involved in the fabrication and assembly of extruded aluminium profiles into aluminium ladders. This also can be used by its customers to fabricate various building materials such as window and door frames.

Through its trading division, Winstar distributes a wide range of building materials, including aluminium profiles, stainless steel, silicone sealants, and ironmongery products. By leveraging the expertise of corporate shareholder Vafe System and parent company Sunview Group Berhad, Winstar Solar expanded into solar PV materials trading and installation services in FY23. By early FY24, the Group has begun to fabricate aluminium solar PV mounting structures for the installation of solar PV systems.

Aluminum extrusion and profile production. Winstar undertakes aluminium extrusion to create profiles primarily used in construction and property development. During the initial product development stage, the Group collaborates with customers to design the die for extrusion and obtain engineering feedback. The die, a thick metal disk with an opening, shapes the aluminium billets into profiles. Once the die design is approved, the Group will engage a third-party supplier to produce it. (Figure 7)

Trading and distribution of building materials to customers in construction, property development, manufacturing, and wholesale industries. Materials are sourced in bulk from suppliers and stored at the Group's facilities for efficient management. Additionally, the Group supports customers by sourcing and procuring building materials that are not typically stocked, ensuring comprehensive service and flexibility to meet various project needs. (Figure 8)

Expanding Into Solar PV Solutions. Winstar has expanded into solar PV system installation services, including fabricating aluminium mounting structures, supporting projects like a 50 MWAC solar PV facility in Pekan, Pahang, rooftop installations in Kuala Langat, Selangor, and car park projects in Shah Alam, Selangor, leveraging its partnership with Sunview Group and its expertise in building materials.

Supplier dependence. Suppliers have consistently played a crucial role in the group's purchasing activities. Formosa, in particular, stands out as a major supplier with a longstanding partnership spanning approximately 20 years. As of the LPD, Formosa has contributed between 40% and 44% of the Group's total purchases from FY21 to 7-month ending FY24. While the group also relies on other suppliers, none of these has contributed more than 10% to the total purchases. (Figure 10)

Source: Mercury Securities Research - 3 Dec 2024