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Wednesday, July 15, 2015

Zhulian 2Q net profit up 34%, declares 1.5 sen dividend

KUALA LUMPUR (July 15): Zhulian Corp Bhd, which is involved in the manufacturing and trading of costume and fine jewellery, saw its net profit increase by 34.3% to RM11.1 million for its second financial quarter ended May 31, 2015 (2QFY15) from RM8.27 million in 2QFY14.

In a filing with Bursa Malaysia today, Zhulian reported a 15.8% decrease in revenue to RM55.27 million in 2QFY15 from RM65.65 million in 2QFY14, mainly due the drop in local market demand.

The group declared a dividend of 1.5 sen per share, payable on Aug 27, 2015.

For the first half of its financial year ending May 31, 2015 (1HFY15), Zhulian reported a net profit of RM23.65 million, 7% lower than its 1HFY14 net profit of RM25.46 million, due to lower revenue.

Revenue for 1HFY15 fell by 16.2% to RM110.49 million from RM131.8 million, mainly due to the drop in local market demand, which was offset by revenue to new overseas markets such as Myanmar and the strengthening of the US dollar.

On prospects, Zhulian said the future market situation remains challenging; and in anticipating the challenges, the group is taking prudent measures in evaluating various initiatives and opportunities to ensure its business continues to attract new distributors as well as retain existing ones.

“This includes increasing the effectiveness of our research and development efforts in developing new products, introducing more promotional campaigns and improving the quality of our customer service,” said Zhulian.

Furthermore, the group will also continue to explore opportunities of tapping into new market segments through the introduction of new products and venturing into new business segments.

“Barring unforeseen circumstances, the board of directors remains cautiously optimistic of the group's performance for FY15,” said Zhulian.

Zhulian (fundamental: 2.7; valuation: 1.4) shares closed unchanged at RM2.05 today with a market capitalisation of RM943 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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