GUH to produce automotive printed circuit boards in China

GUH Holdings Bhd, one of the largest manufacturers of printed circuit boards (PCBs) in the country, will produce automotive PCBs in China to reduce its dependence on the consumer electronic goods industry.

Group managing director Datuk Seri Kenneth H’ng told StarBiz that the group would manufacture in multi-layered printed circuit board (PCBs) at its upcoming manufacturing facility in Yancheng, Jiangsu, in late 2020.

“The plant is scheduled for completion in early 2021 and we expect it to contribute to the group’s revenue in 2021,” H’ng said.

The new plant will raise GUH’s PCB production capacity from 310,000 sq m per month (or 3.72 million sq m per annum ) to 410,000 sq m per month (or 4.92 million sq m per annum).

“Currently, the automotive PCBs are produced at the Bayan Lepas plant.

“When we started producing automotive PCBs here a few years ago, the contribution of automotive PCBs was insignificant.

“Today, it has increased to more than 15% of the Bayan Lepas plant’s revenue, driven by the smart infotainment and navigation system used in cars.

“The growth of the automotive sector in Asia, Latin America, and the Middle East also impacts positively on the automotive PCB market,” he said.

According to a new Market Research Report, the global automotive PCB market is expected to experience a 5.98% compounded annual growth rate (CAGR) for the 20182023 period.

“In 2017, the infotainment system segment accounted for 56.6% market share.

“During the forecast period, the segment is expected to increase at a 6.24% CAGR,” the report said.

GUH is investing US$22mil for the Yancheng plant which will enable the group to tap into the huge domestic market with the delivery of high quality products at a competitive price.

Currently, GUH manufactures PCBs for branded home appliances, consumer electronic, air conditioners, audio, video and music products.

The PCB business generates more than 80% of the group’s revenue in 2018.

According to H’ng, the group is expected to register a 5% to 10% growth in 2019 over 2018.

“We set this target because of the slowdown in the property and the water treatment market, which will impact on our top and bottom line for 2019.

“Our property division foresees property sales to remain stagnant because of the tough operating environment.

“The water treatment division also faces challenging times because of the intense competition in open market tendering,” he said. The group’s subsidiary, Teknoserv Engineering Sdn Bhd, is currently tendering for RM500mil worth of water treatment projects, which it hopes to secure in the second half of 2019.

“We are exploring build, operate, and transfer (BOT) water treatment opportunities in SouthEast Asia that will generate recurrent and stable income,” H’ng said.

On the property division, GUH is now planning the overall master development plan for the 46 acres development land at Simpang Ampat, Penang.

“It will be an integrated township development with vast landscape, integrated infrastructures to accommodate public transport system, lifestyle shops, housing schemes, and a commercial hub,” he said.

As of Dec 31 2018, GUH’s total assets stand at RM689.7mil, an increase of 1.8% from RM677.3mil in 2017.

The increase is due to the additional capital investment and growth in businesses.

Its total receivables has decreased by 11% to RM71.2mil from RM80mil in 2017.

As at Dec 31 2018, GUH has net cash in hand of RM106.5mil, compared to RM96.2mil in 2017.

Source: The Star