GUH ventures into EV business to expand revenue base - MIDA | Malaysian Investment Development Authority
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GUH ventures into EV business to expand revenue base

GUH ventures into EV business to expand revenue base

13 Feb 2023

Printed circuit board (PCB) producer GUH Holdings Bhd is expanding into the electric vehicle (EV) business to broaden its revenue base.

The group has recently acquired a 70% stake for RM2.1mil in Star Wheels Electronics Sdn Bhd, a company involved in the sales, distribution, manufacturing, assembly and repair of electric scooters, hoverboards and spare parts.

“Star Wheels generates RM2mil to RM3mil sales per annum. The company has nine sales outlets in the country and distributors in the Philippines and Australia,” GUH managing director Datuk Seri Kenneth H’ng told StarBiz, adding that the EV business has good growth potential.

“For example, the e-scooter-sharing business in Malaysia is expected to hit US$6.7mil (RM29mil) in 2023 and is projected to grow at an 18.9% compounded annual growth rate (CAGR) over the 2023-2027 period to reach US$13.5mil (RM58mil) by 2027.

“In the e-scooter-sharing segment, the number of users is expected to amount to 1.1 million by 2027. User penetration is 1.9% in 2023 and is expected to hit 3.2% by 2027.

“The average revenue per user is expected to amount to US$10.71 (RM46),” he said.

Some 600,000 new bikes are registered with the Road Transport Department annually, of which less than one per cent are EV scooters.

H’ng said the group’s PCB business, its core activity, is still stable despite the inflation and higher interest rates.

“Our PCBs are manufactured by international brand names and used in electrical and electronic household appliances, automobiles and medical fields. The forecast for our PCBs is still stable.”

According to The Business Research Company, the global household appliances market is expected to grow from US$551.29bil (RM2.39 trillion) in 2022 to US$606.58bil (RM2.63 trillion) in 2023 at a CAGR of 10%.

“The household appliances market is expected to grow to US$859.71bil (RM3.72 trillion) in 2027 at a CAGR of 9.1%.

“However, the group still needs to reduce its dependence on its PCB business,” he said.

Recently, the group has entered into a memorandum of understanding with Jiangsu Xinri International Trading Co Ltd.

The deal will see GUH eVehicle being appointed as the exclusive distributor and representative to market, promote, distribute, assemble, manufacture and sell electric motorbikes supplied by Xinri in Malaysia under the brand name GUH Sunra.

GUH eVehicle is an indirect wholly-owned subsidiary of GUH incorporated in Malaysia.

GUH eVehicle’s principal activities are research and development on lithium battery-powered vehicles, manufacture and assembly of EVs and all forms of E2, E3 and E4 wheelers, as well as sales and marketing and after-sales servicing of EVs and all-encompassing products.

Jiangsu Xinri International is a wholly-owned subsidiary of Jiangsu Xinri E-Vehicle Co Ltd, a company listed on the Shanghai Stock Exchange.

Founded in 1999, Jiangsu Xinri specialises in research and development, manufacturing and sales of EVs under the Sunra brand.

According to H’ng, GUH plans to invest RM10mil in EV and EV-related businesses.

He said the proposed collaboration with Jiangsu Xinri provides GUH with an established platform with good growth prospects that will contribute to the group’s long-term growth.

“GUH continuously evaluates investment opportunities to increase its shareholders’ value and takes a long-term view in its investment approach.

“EV is a global trend and stakeholders from governments to manufacturers are putting effort into moving from traditional petrol-fuel vehicles to EV.”

Source: The Star