The year began with some of the most difficult economic conditions ever faced by many industries, as tight credit, weaken consumers’ demand and uncertainty in future economic outlook caused electronics manufacturers production significantly reduced as a result of collapse in key OECD economies. In turn, this caused export centers in the PRC, South East Asia and other markets in which the Group operates to suffer sharp declines in output and industrial production.

Despite of the economic turmoil, The Group managed to finish the year with higher net profit and Net Tangible Asset (NTA). This is accredited to the swift action of our management team in implementing effective pre-emptive crisis control measures.

All our Sales Business Units (“SBU”) and business segments were affected by the global economic crisis, except for sales increased in Penang and Micron business for Toshiba in Shanghai in financial year (FY) ended 2009.

Sales were mostly affected in the first quarter of the year, with a moderate improvement in second quarter of the year. There was a significant improvement in second half of the FY2009, spurred by restocking of depleted inventory levels by many of our customers.

REVENUE BY SEGMENT

Despite the crisis, the Group achieved another record turnover in FY2009, with revenue rising 4.1% to S$169.4 million as compared to S$162.8 million in FY2008.

We enjoyed a tremendous sales increase in Referral Business, by 32.1% or S$28.6 million from S$89.1 million in FY2008 to S$117.7 million in FY2009, due to strong memory chip demand from notebook manufacturers in China.

This was off set by declines in our Distribution and Procurement Service segments as a result of the economic conditions. Our Distribution Business revenue decreased 8.5% from S$41.4 million in FY2008 to S$37.9 million in FY2009. Our Procurement Services business, which was exposed to the weak US economy saw revenue decline 57.8% from S$32.0 million in FY2008 to S$13.5 million in FY2009. 

Our Procurement Services revenue was severely impacted by negative business conditions from much weaker demand in North American. Sales reduced 57.8% in FY2009 from S$32.0 million to S$13.5 million in FY2008. As a result, Procurement Service sales only accounted for 8.0% of total revenue in FY2009 as compared to 19.7% in FY2008.

REVENUE BY MARKET

Singapore

Singapore revenue decreased from S$9.2 million in FY2008 to S$6.5 million in FY2009. The decrease in revenue was due to lower sales from Pioneer Electronics Asia, Panasonic AVC and certain customers.

PRC (including Hong Kong)

Sales in our China market (including Hong Kong) increased significantly to S$122.8 million in FY2009 as compared to S$95.8 million in FY2008.Excluding the lower yield handling business for Micron, sales of other components in Shenzhen and Shanghai office decreased. The Micron business accounted about S$84.0 million, or 68.4% of total revenue generated in China.

Malaysia

Sales originated from Malaysia fell 26.8%, from S$32.3 million in FY2008 to S$23.6 million in FY2009. This was primarily due to lower Procurement Services sales in Johor. Sales from Kuala Lumpur and Penang office showed a combined increase in FY2009  The increase in sales in Kuala Lumpur and Penang was mainly due to the higher sales to Sony and S&O. However, the Agilent business in Penang experienced lower sales as several models reached “end of life” and more localization of other products.

Indonesia

Sales originated from Indonesia have reduced from S$5.4 million in FY2008 to S$4.7 million in FY2009. The decrease is due to lower sales from existing customers such as Epson and Yamaha.