Navigating the dynamic landscape of Malaysia’s automotive sector, Feytech Holdings Berhad, a prominent player in automotive parts manufacturing, has just unveiled its unaudited interim financial report for the first quarter ended 31 March 2025 (1Q FY2025). This report provides a crucial glimpse into the company’s performance, highlighting both immediate challenges and strategic maneuvers for future growth.
While the quarter saw a significant dip in revenue and profitability compared to the same period last year, influenced by market normalization and seasonal factors, Feytech’s proactive approach in securing new projects and its robust cash position offer a beacon of resilience. Let’s dive into the key figures and strategic insights from this latest report.
Core Data Highlights: A Challenging Quarter Amidst Market Shifts
Overall Financial Performance (1Q FY2025 vs. 1Q FY2024)
The first quarter of 2025 presented a challenging environment for Feytech Holdings. The group recorded a substantial decrease in its top-line and bottom-line figures when compared to the corresponding quarter of the previous year.
1Q FY2025
Revenue: RM29,492k
Gross Profit: RM5,887k
Profit Before Tax (PBT): RM2,647k
Profit After Tax (PAT): RM2,074k
Earnings Per Share (EPS): 0.25 sen
1Q FY2024
Revenue: RM70,645k
Gross Profit: RM28,154k
Profit Before Tax (PBT): RM23,170k
Profit After Tax (PAT): RM16,882k
Earnings Per Share (EPS): 2.41 sen
Revenue for 1Q FY2025 stood at RM29.49 million, marking a significant decrease of 58.3% compared to RM70.65 million in the first quarter of 2024. This decline filtered down to profitability, with Gross Profit plummeting by 79.1% to RM5.89 million. Consequently, Profit Before Tax (PBT) saw an 88.6% reduction to RM2.65 million, and Profit After Tax (PAT) decreased by 87.7% to RM2.07 million. Earnings Per Share (EPS) also reflected this trend, falling to 0.25 sen from 2.41 sen.
The report attributes this downturn primarily to lower order volumes from three key automotive brands, which impacted both the automotive seat and cover segments. The reduced production volumes also led to an under-absorption of fixed manufacturing costs, further pressuring gross profit margins.
Segmental Performance: Both Pillars Face Headwinds
Feytech’s two core business segments, manufacturing of automotive covers and automotive seats, both experienced a notable contraction in 1Q FY2025:
Automotive Covers: Revenue decreased from RM34.41 million (1Q FY2024) to RM15.54 million (1Q FY2025), a 54.9% decline. Segment profit fell from RM15.01 million to RM4.11 million.
Automotive Seats: Revenue dropped from RM36.23 million (1Q FY2024) to RM13.95 million (1Q FY2025), a 61.5% decrease. Segment profit was also significantly impacted, moving from RM13.14 million to RM1.78 million.
The report underscores that the reduced sales orders from automotive brands were the main factor affecting performance across both product segments.
Performance Against Immediate Preceding Quarter (1Q FY2025 vs. 4Q FY2024)
Comparing the current quarter’s results against the immediate preceding quarter (4Q FY2024) also reveals a softening trend:
1Q FY2025
Revenue: RM29,492k
Gross Profit: RM5,887k
PBT: RM2,647k
PAT: RM2,074k
4Q FY2024
Revenue: RM33,170k
Gross Profit: RM11,339k
PBT: RM8,384k
PAT: RM6,990k
Revenue decreased by 11.1%, primarily due to lower sales of both automotive seats and covers as two automotive brands experienced reduced vehicle demand. This led to a 48.1% decline in gross profit and substantial drops in PBT (68.4%) and PAT (70.3%), reflecting margin pressure from lower production volumes.
Financial Health: Strong Cash Position and Strategic Investments
Despite the revenue challenges, Feytech’s balance sheet remains robust. Total assets stood at RM315.58 million as of 31 March 2025, with total equity at RM246.35 million. Notably, the company maintains a healthy cash and short-term deposits position of RM145.84 million, an increase from RM137.44 million at the end of FY2024.
The group’s net cash generated from operating activities significantly improved to RM10.54 million in 1Q FY2025, compared to RM2.52 million in the same period last year, indicating effective working capital management despite the sales slowdown. This strong operational cash flow contributes to the solid cash reserves.
Regarding its Initial Public Offering (IPO) proceeds, Feytech has utilized RM60.18 million out of the total RM114.66 million raised, primarily for working capital and listing expenses. Significant portions allocated for land acquisition, new corporate office/manufacturing plants, and machineries (totaling RM54.49 million) are yet to be utilized, with some timeframes for utilization extended, indicating planned future investments.
| Purpose | Proposed Utilisation (RM’000) | Actual Utilisation (RM’000) | Balance to be Utilised (RM’000) |
|---|---|---|---|
| Acquisition of land | 11,600 | – | 11,600 |
| Construction of new corporate office with manufacturing plant and warehouse | 21,125 | – | 21,125 |
| Construction of new Kulim Plant 2 | 18,760 | – | 18,760 |
| Purchase of new machineries | 3,000 | – | 3,000 |
| Working capital | 52,175 | 52,175 | – |
| Estimated listing expenses | 8,000 | 8,000 | – |
| Total | 114,660 | 60,175 | 54,485 |
Risks and Prospects: Navigating a Normalizing Market with Strategic Growth
Feytech acknowledges that its performance is intrinsically linked to the Malaysian automotive sector. The Malaysian Automotive Association (MAA) forecasts a normalization in vehicle demand, projecting a 4.5% decline in Total Industry Volume (TIV) to 780,000 units in 2025—the lowest in three years. This slowdown, coupled with intense competition from new foreign automotive brands, is exerting downward pressure on pricing across the supply chain.
The first quarter’s softness was also attributed to seasonal factors like Chinese New Year, Ramadan, and Hari Raya, which typically result in fewer working days and delayed delivery cycles.
Despite these headwinds, Feytech is actively pursuing several strategic avenues:
- New Business Opportunities: A strong focus on Completely Knocked-Down (CKD) projects from both existing and prospective Original Equipment Manufacturer (OEM) customers in Malaysia.
- New Model Contributions: The group has successfully secured several models from a foreign automotive brand, which began gradually contributing to revenue in 1Q FY2025. Additionally, a facelift model from one of its key customers is expected to resume production, with volume contributions anticipated in subsequent quarters.
- Joint Venture with Ruitai: The joint venture agreement with Wuhu Ruitai Auto Parts Co., Ltd. (Ruitai), signed in December 2024, aims to engage in the design, manufacturing, and assembly of automotive seat components and parts for both Malaysian and overseas markets. While Ruitai’s equity participation is pending regulatory approval in China, both parties are actively collaborating on product localization and project development, particularly for potential supply to Chery company customers.
- Operational Efficiency and Diversification: Feytech remains committed to stringent cost control and enhancing operational efficiency to manage market pressures. Furthermore, the company is exploring new business segment opportunities that align with its core strengths in automotive parts and component manufacturing, aiming to diversify revenue streams and bolster long-term sustainability.
Summary and Outlook
Feytech Holdings Berhad’s 1Q FY2025 report clearly indicates a challenging period marked by significant declines in revenue and profitability compared to the previous year and immediate preceding quarter. This was largely driven by reduced order volumes from key automotive brands and seasonal slowdowns in the Malaysian automotive market.
However, the company is not standing still. Its robust cash position, coupled with proactive strategic initiatives such as securing new CKD projects, onboarding new foreign automotive brand models, and the promising joint venture with Ruitai, demonstrate a forward-looking approach to navigate the normalizing market. The focus on cost control, operational efficiency, and exploring new business segments underscores a commitment to long-term resilience and diversification.
Key risk points to monitor for Feytech include:
- The projected slowdown in Malaysia’s Total Industry Volume (TIV) for 2025.
- Intensified competition from new foreign automotive brands and resulting pricing pressures.
- The successful integration and realization of benefits from new projects and the Ruitai joint venture.
- The ability to maintain cost control and operational efficiency amidst fluctuating production volumes.
While the immediate outlook remains challenging, Feytech’s strategic pivots and ongoing efforts to diversify and strengthen its market position are crucial for its future trajectory.
From a professional standpoint, Feytech’s proactive stance in a challenging market is commendable. Their emphasis on securing new projects and diversifying revenue streams, such as the Ruitai joint venture, suggests a strategic foresight beyond immediate market fluctuations. The strong cash reserves provide a buffer to execute these plans, even as the company navigates a period of reduced demand.
How do you foresee Feytech’s strategic pivot and new collaborations impacting its performance in the coming quarters amidst a normalizing automotive market? Share your thoughts in the comment section below!
