see how they replied.. (hopeless)

We wish to emphasis that, all relevant information and progress development that are required to be disclosed have been duly released through our quarterly reports, annual report and separate announcement to Bursa Malaysia Securities Berhad. You may refer to the same channel for any future development update.

On behalf of management, we extend our appreciate for your comment, interests and continued support in Heng Huat.

Thank you.

On behalf of Mr. Lim Ghim Chai

Hi Cheng,

I would accept answer for my questions#1 but for questions#2 & #3, I do not think you have answered them properly.

Question#2: disclosure of current utilization rate is not prohibited by the listing requirements. Many listed companies do disclose this info. Why can't HHgroup disclose as well? For example, Evergreen Fibreboard, Airasia, etc do disclose this information. So I am demanding for this info. Ok, you can say that the new factory is built to support "mid to long term" increasing demand (that you expect to grow in mid to long term). Fine, I can accept that. But you have not even answered what is the current utilization rate (90%, 95%)? that can justify for building the new factory. If the increasing demand can be absorbed by the existing factories, what is the point of building the new factory? It is a waste of money and resources.

Question#3:
Again, company like Evergreen Fibreboard (for example) is a very transparent company. They can share with shareholders what are the corrective actions / rationalization plan to overcome bad situations and their effort to cut costs/improve profit margin. They provided corporate update report on their website from time to time. Instead of just answering that the management is looking into the issue and had put in place appropriate actions, shareholders demand for more specific explanation in terms of HOW and WHAT the management is going to do to overcome it.

I think my questions are fair and as a shareholder, we demand for a more transparent view of the management.
Also, as an active blogger, I have my responsibility to share the actual scenario to my readers. Do you want me to copy and paste your "so-called" answers to my blog and let my readers to judge if these are indeed "answers"? Political correctness does not apply to responses from any listing companies. We demand for exact and accurate info instead of beating around the bushes. My readers and the other HHgroup shareholders will definitely be disappointed with these "answers" if I were to post them on my blog.


Hi Mr Lim Chim Chai,
You are also copied in this email so I hope to hear something more constructive from you.
Please respond.
Thanks.

Please find below for your update.

Reply question 1
As disclosed in the Company's Quarter 3 Financial Report, the demand from China (in terms of volume) has been on gradual recovery but the overall sales volume recorded during the 9-months period ended 30 September 2016 has yet to reach the prior peak. Hence, as compared to prior year corresponding period, the sales remained comparatively lower.

As disclosed in the Company's Quarter 3 Financial Report, the loss position recorded during the 3-months ended 30 September 2016 (Quarter 3, 2016) was primarily due to lower sales recorded from the mattress division as a result of cyclical slowdown in retail sales.

The sales generated from mattress division in Quarter 3, 2016 stood at RM4.56 million as compared to RM5.75 million in Quarter 2, 2016. (These data have been duly disclosed in the respective quarterly reports, under Note A13 - Segment Information)

Reply Question 2
For the near future, the Group expect the orders for oil palm EFB fibre from China will experience greater degree of volatility due to the prevailing economic uncertainties. Notwithstanding that, our Group remain cautiously optimistic that orders for oil palm EFB fibre from China in the mid and long term will be promising backed by the rising population in China and increasing demand for raw material alternatives that are cheaper, natural and environmentally-friendly.

As disclosed in the Company's Quarter 3 Financial Report, the new factory at Gua Musang is to enable the Group additional capacity to tap into new customer segments as well as market coverage in China. This is in line with the prospects, where the Group remain cautiously optimistic that demand for oil palm EFB fibre from China in the mid and long term will be promising barring any unforeseen circumstances.

Reply Question 3
The Board of Directors and the Management are monitoring the industry development and have put in place appropriate actions. Further details and development will be disclosed in the future financial reports where appropriate and necessary.


On behalf of the Management, we extend our appreciation for your feedback. As far as the Group is concerned, the response provided herein are by far what we are allowed to disclose at this juncture in accordance with the Listing Requirements. Any future development, where necessary, will be announced accordingly either as separate announcement to Bursa Malaysia Securities Berhad or disclosed in the interim and/or annual financial reports.

Thank you.

worse.. this executive director really is hopeless.. he never bothered at all

Hi Mr Lim Ghim Chai,

As I am not getting any proper reply from Mr Cheng (please see email string below), I would like to seek for your explanation.
Please help respond.

Hello Cheng,

Can you reply my email?

i am not satisfied by their "politically correct answer" so i asked again:

Hi Cheng,

I can see the "so-called answers" you provided from the quarterly report but it did not answer my questions at all.

Can you spend a bit more time and sincerity in answering my questions?

Question1:
I am asking why you have been saying that market has improved; but Q3 results is worse than Q2. Your explanation is a comparison of preceding year corresponding quarter which is 2015 Q3 vs this quarter 2016 Q3. I am actually asking about the comparison between 2016 Q2 & Q3. The explanatory notes in the latest quarterly report does not tell exactly what had caused the company to make loss (despite claiming that the recovery in China is picking up) If demand has picked up since Q2 to Q3, why Q2 made a small profit but Q3 made a loss? Is the demand getting worse (so need to lower the average selling price) or improving? If improved, why the ASP is lower? I am totally confused.

Question2:
Again, I can see your "answer" from quarter report. You have not answered my question.
WHAT IS THE PRODUCTION UTILIZATION RATE OF YOUR CURRENT FACTORIES? If the demand for EFB fibre is poor now (in China), why is the company building a new factory? Are you going to sell the additional materials at lower selling price (with a loss)? Can't you put the new expansion plan on hold until the market recovers? With new factory but no additional demand from customers, even if you are not operating the new factory, it will incur fixed operation cost and other expenses such as overhead and depreciation.

Question3:
Which countries are you looking to expand your sales to? Please be more specific. And what is the corrective action/plan to stop loss and improve profitability?

Please answer my questions seriously.

after i received the email from HHgroup management, i sold all my shares at a loss...

you can see how bad their management is.. how not transparent they are.. how not honest they are in answering questions... taichee master in answering questions and no solution..

really lousy company:

Hi Mr Cheng,


I have a few questions:

Question 1) In previous report (Q1 & Q2 reports), it was stated that the demand in China is slowly picking up. Then why was Q2 seeing a net profit but Q3 seeing a net loss? Can you provide explanation?

Answer1)
Sales
For the current quarter ended 30 September 2016, the Group recorded revenue of approximately RM17.85 million, marginally lower by 1.05% or RM0.19 million as compared to revenue of RM18.04 million in preceding year corresponding quarter.

For the financial period ended 30 September 2016, the Group recorded revenue of approximately RM57.36 million, decreased by approximately 19.29% or RM13.71 million as compared to revenue of RM71.07 million in preceding year corresponding period.

The moderation of sales performance for the nine (9) months period ended 30 September 2016 was primarily due to the following factors:

i. Lower sales of oil palm EFB fibre to China market. The market sentiment within the China’s operating environment was weighed down by the economic uncertainties during the second half of 2015 and notwithstanding that the demand has been on gradual recovery during the financial period ended 30 September 2016, the sales volume has yet to reach the prior peak; and

ii. Decrease in average selling prices of oil palm EFB fibre, in order to strengthen the Group’s market competitiveness, in view of the prevailing economic uncertainties.


Profit Level
For the current quarter ended 30 September 2016, the Group recorded net loss after tax of approximately RM0.53 million as compared to net profit of RM2.90 million in preceding year corresponding quarter. The loss was attributable to the following factors:

i. Lower margin from sales of oil palm EFB fibre as a result of decrease in average selling price as explained above;

ii. Lower foreign exchange gain recorded during the current quarter under review, as the exchange rate fluctuation between US Dollar and Ringgit Malaysia was relatively less volatile as compared to preceding year corresponding quarter; and

iii. Higher forwarding and freight charges incurred during the current quarter under review in line with the increase in oil palm EFB fibre delivery volume to China as compared to preceding year corresponding quarter.


For the financial period ended 30 September 2016, the Group recorded net profit after tax of approximately RM0.55 million as compared to net profit of RM12.38 million in preceding year corresponding period. The moderation of the profit performance was primarily due to lower revenue and increasing cost of sales which resulted in lower gross profit recorded.


Question 2) As the market sentiment in China is not good, why is GGgroup still proceeding with the Gua Musang production factory expansion? What is the production utilization rate of current factory to justify for a new factory under such economic situation? please explain.


Answer 2) For the near future, our Group expect the orders for oil palm EFB fibre from China will experience greater degree of volatility due to the prevailing economic uncertainties. Notwithstanding that, our Group remain cautiously optimistic that orders for oil palm EFB fibre from China in the mid and long term will be promising backed by the rising population in China and increasing demand for raw material alternatives that are cheaper, natural and environmentally-friendly.

Upon completion of our new production factory at Gua Musang, our Group will have an increased capacity that enables us to tap into new customer segments as well as expand our market coverage in China. The new production factory is currently under construction and is targeted to be completed by the first quarter of 2017.

Barring any unforeseen circumstances and adverse external economic factors, the Board of Directors is of the view that the Group’s financial performance for the financial year ending 31 December 2016 will remain positive.


Question 3) As the results were still poor (from mid of 2015 until now), is the management thinking of any corrective actions plan? Perhaps diversify the sales to non-China countries like Europe/Africa/US?

Answer 3) Thank you for highlight. Our marketing is working hard to market our products locally and internationally.

Hope to hear from you soon.