PETALING JAYA: Apparel maker PCCS Group Bhd is kicking off its hire purchase business this month with a RM5 million loan book, and is expecting this division to start contributing revenue in the current financial year ending March 31, 2022.
Its group managing director, David Chan Wee Kiang (pix), is confident that Southern Auto Capital Sdn Bhd, the group’s hire purchase business, will start contributing revenue to the group now that Malacca has entered Phase Two of the National Recovery Plan. Once Johor enters Phase Two, this pace of growth will be quickened. PCCS’ hire purchase business is based in Malacca and Johor.
The Covid-19 pandemic has led to an increase in used-car sales as people become more sensitive to auto cost in the recession.
“There is in fact pent-up demand in the used-car market. We are hoping to give out loans of RM1 million every month starting this month,” said Chan.
Across Malaysia, there is now a greater inventory of used vehicles online. Dealers are accelerating digital efforts as they can see that the demand is there.
“Barring any further lockdowns and assuming the economy returns to normal, we are aiming to more than double the hire purchase loan book size in the next financial year,” said Chan.
PCCS entered into a joint venture with Justin See Kok Wah to form Southern Auto Capital on April 19, 2021. The joint venture was to establish and operate a used-vehicle financing and insurance business in Malacca and Johor. PCCS invested RM4 million for an 80% stake in the joint venture, while See held the remaining 20% with a capital of RM1 million. Hence, Southern Auto Capital is the wholly owned subsidiary of PCCS.
PCCS announced a decent set of financial results for its first quarter ended June 30, 2021. Despite the pandemic, PCCS recorded a 21.7% jump in net profit to RM1.97 million on the back of a 9.22% increase in revenue to RM114.5 million in revenue. The company remains financially solid with cash of RM52.87 million as of the period. The company also declared an interim dividend of 1 sen for its financial year ending March 31, 2022. This dividend goes ex on Oct 5, while payment date is on Nov 1.
Chan also said that PCCS’ manufacturing plant for its medical devices is now in construction of production facilities.
Earlier this year, PCCS’ wholly owned subsidiary, La Prima Medicare Pte Ltd, inked an exclusive shareholder agreement with Shanghai Shenqi Medical Technology Co Ltd to market its cardiology-related product, namely the Drug-Coated Balloon (DCB), within the Asia Pacific, excluding China and Japan.
“For the medical business, we are currently in the midst of applying for medical device registration with the authorities in countries such as Vietnam, Indonesia, Thailand, Malaysia and Singapore. We are optimistic that we will be able to complete the registration process in at least one of those countries before the end of the financial year ending March 31, 2022,” said Chan.