I look forward to working with our stakeholders in FY2018 as the Group prepares itself for the gradual but steady ascent to the top after having weathered
the worst of headwinds in the past few years.

2017 was a good year for the global economy, despite worries about the trade policies of the Trump administration in the United States.

Global output grew by 3.7% in 2017, compared to 3.2% in 2016, according to the International Monetary Fund (IMF). The strong showing was driven by increased activity in Europe, Japan, China and the United States.

Amidst the positive economic data, YHI International Limited (“YHI” or “the Group”) posted its best performance in three years for the financial year ended 31 December 2017 (FY2017), even as we continued to be buffeted by cyclical headwinds that continued to blow within the industry.

FY2017 saw the Group posting a net profit of $8.8 million, after tax and non-controlling interests attributable to shareholders of the Company - an increase of 136.9% from $3.7 million in FY2016. This was our best showing since 2013, when we posted a net profit of $8.8 million.

The rise in net profit is a testament to the fact that we are on the right track with our consolidation and transformation efforts -- embodied by our “3R” policy which was first implemented in 2014.

The policy entails all our business units to focus on 3Rs -- reduce inventory, reduce account receivables, reduce operating costs. In the initial stages, we focused our efforts on reducing inventory by clearing old stock and curbing excessive purchases to bring the overall stock-holding to below three months’ projected sales. We also strove to improve our collection methods to reduce account receivables to healthier levels.

Since 2016, we have devoted our energies to the last but certainly not least of the 3Rs -- reducing our operating costs, right-sizing businesses to align operations with sales, and eliminating non-profit-making assets like our factory in Shanghai.

Four years into its implementation, the 3R policy has helped the Group to reduce excess capacity, optimise our resources and reduce wastage. As such, despite the challenging operating environment, we firmly believe that our strong fundamentals will help us to achieve not only continued and sustainable growth but also deliver stable returns to our

The Group posted revenue of $442.9 million and net profit attributable to equity holders of the Company (“net profit”) of $8.8 million in FY2017, representing a year-on-year decrease of 4.9% in revenue and a 136.9% increase in net profit respectively as compared to FY2016.

The decrease in revenue was mainly due to lower sales in the manufacturing business, while the increase in net profit was aided by the positive contribution from all 3 wheel factories and the complete cessation of our wheel manufacturing operations in Shanghai.

Our gross profit increased by 3.4% to $103.8 million compared to last year. Our gross profit margin also rose to 23.4% compared to 21.6% in FY2016, thanks to higher gross profit margins from both our distribution and manufacturing businesses.

The distribution business remained the main contributor to the Group’s revenue, constituting 72.8% of the total turnover. Reflecting the overall decrease in revenue, the distribution business posted sales of $322.4 million, 0.4% lower than the same period last year.

Our tyre distribution business continued to be affected by weak market demand and oversupply of tyres, which resulted in intense price pressures. The oversupply has led to price competition and further margin erosion.

Despite the difficult conditions, our distribution business has managed to moderate their impact through sales of different product mix and rigorous cost control measures.

The Group’s wheel manufacturing business registered sales of $120.5 million, a 15.0% decrease in turnover mainly due to cessation of operation in Shanghai despite higher sales recorded by Suzhou, Malaysia and Taiwan factories. However, we are confident that the consolidation exercise that we have embarked on in the past few years in Malaysia and then China will help our wheel manufacturing business to weather the tough operating environment.

In FY2017, we completed our plans to move the production capacity of our Shanghai factory, including machinery, to our facilities in Suzhou and Malaysia. The restructuring costs related to the cessation of operations in Shanghai, such as retrenchment, impairment of machines, as well as repair and maintenance of the Shanghai factory, had partly impacted the overall profitability of the wheel manufacturing business.

With our mould and wheel manufacturing operations in China now centred just in Suzhou, we expect savings in rental and fixed overhead costs, as well as increased efficiency, to have a positive impact on future profit.

As we continue to right-size our operations in line with changing market and industry demands, we are confident that these measures will help us to strengthen our balance sheet and provide us with the resources needed as we seek new growth opportunities and markets.

With our 3R policy helping us to manage costs effectively, the Group’s balance sheet remained in a healthy state.

As at 31 December 2017, we generated total net cash flow of $22.7 million from operating activities, with cash and cash equivalents amounting to $54.0 million. Total assets stood at $387.5 million, with $260.9 million in net assets attributable to shareholders, translating to a net asset value per share of 84.88 cents per share based on the 292.3 million shares in
issue. The Group’s net gearing ratio was at an acceptable 12.5% as at 31 December 2017.

Despite the challenging environment, the Board is recommending a first and final tax-exempt cash dividend of $1.50 cents per ordinary share for FY2017, subject to approval at our annual general meeting to be held on 26 April 2018.

This represents a dividend yield of 3.2% based on the share price closing of $0.47 as at 31 December 2017 and a dividend payout of 50% of our profit. Our distribution of the dividend is not only a reflection of our commitment to returning value to shareholders but also a recognition of their strong support and belief in YHI.

Global sentiments for 2018 have become more upbeat, with the IMF expecting global economic growth to accelerate to 3.9% this year, driven by improvement in advanced economies.

However, there are risks on the horizon, namely the prospect of a global trade war following President Donald Trump’s announcement in March to impose tariffs of 25% and 10% on imported steel and aluminium respectively. The Trump move has sparked fears that other countries would retaliate by imposing their own tariffs to prevent cheap steel being
diverted from the US market into theirs.

Other concerns include possible tensions in the Middle East crippling global energy markets, and an economic downturn in China. While the Chinese government has set its GDP growth target at around 6.5 % for 2018, economists noted that its plans to tighten controls on local government debt, and trade tensions with US, may undermine the strong
growth China had registered in the first few months of the year.

Such downside risks aside, YHI expects the overall business operating environment to remain challenging, given the intense competition we face in the regions we operate.

We expect intense price competition to continue in 2018 due to the prevailing overcapacity in the tyre industry. However, we are hopeful that the industry is about to turn the corner. As China’s economic restructuring efforts proceed apace, which will lead to the closure of thousands of inefficient manufacturing plants, the problem of oversupply in the tyre industry is likely be contained in the near future.

In 2018, we plan to increase our focus on ASEAN, namely Malaysia, Indonesia and the Philippines.

Malaysia, which is currently our No.1 market, has reaped benefits from the consolidation exercise that saw the moving of our operations from Sepang to Malacca in 2015. Our
Malacca operations are now among the best performing within the Group, thanks to the enhanced efficiencies arising from the streamlining of our operations and the leveraging of greater synergies from operating only one manufacturing facility. We plan to further strengthen our presence in the country — where the markets for tyres and power products are expected to see strong growth in the near future on the back of rising demand for vehicles and increasing purchasing power of consumers — via our subsidiaries, YHI Power (Malaysia) Sdn Bhd, and the newly incorporated YHI Logistics (Malaysia) Sdn Bhd.

YHI Power, incorporated in 2016, handles the export of power products into Malaysia, while YHI Logistics, which was incorporated in January 2018, will focus on the provision of logistics services there.

With its growing middle class and an economy that is expected to grow 5.4 percent in 2018, Indonesia remains a market with strong growth potential for the Group despite some challenges.

For 2018, we also plan to step up our 3M marketing strategy — multiproduct, multi-brand and multi-category — in Indonesia, such as developing new sales channels for our tyres, focusing on the premium wheels brand segment, and extending our industrial battery business into non-golf markets.

Following a joint venture agreement signed in October 2017, we will have a stronger foothold in Myanmar from 2018. Our local partner is Aung San Company, a private firm dealing with the import of car products such as wheels, tyres, accessories, spare parts and general merchandise.

The new joint venture company, YHI Aung (Myanmar) Company Limited, will develop and establish the marketing business of car and industrial products in Myanmar

Australia, whose economy has been affected by falling commodity prices, is also another promising market this year, given that the prices of raw materials had been on an upward trend in recent months. According to an OECD forecast, the Australian economy is likely to grow by 3% in 2018, compared to 2.4% in 2017. The improving economy has led to an
uptick in consumer spending, as reflected by the strong sales of new vehicles in recent months.

However, we expect high raw material prices and a weak US dollar to impact the margins of our manufacturing business, given that aluminium is a key component of our wheel manufacturing business.

While we will continue to maintain a presence in China, a country we ventured into 25 years ago, all of our wheel manufacturing operations are now consolidated in one city, Suzhou, following the closure of our Shanghai facility. We expect rental income contribution from the Shanghai factory to have a positive impact on future profit.

Despite our scaled-down presence in China -- where labour and operations costs have been rising in recent years -- we are confident that we will continue to make our mark in the country by leveraging on the brands and quality of our products.

No matter which way the economic winds will blow in 2018, the Group will continue to strengthen our internal processes and mechanisms to ensure that we will not be caught flat-footed.

Back in 2014, we began focusing our energies into implementing the 3Rs across our business to meet the challenges arising from external factors as well as keeping pace with the vagaries of the business landscape. The main concern then was to reduce operating costs through restructuring and right-sizing our businesses, and improving efficiency and productivity.

Since 2016, however, we have started to place greater emphasis on finding new sources of growth, even as we maintain our focus on reducing operating costs. This year, we will continue to pursue this twin strategy of pursuing growth in tandem with cost-controls with even greater zeal. This includes developing new business opportunities by increasing the reach and network of our distribution channels, and seeking synergistic joint ventures, partnerships or other forms of business tie-ups to widen our revenue stream and open up new markets to our products.

We will also continue to invest in research and development, to innovate and improve technical competencies, and harness technology to improve our production processes to bring down further production costs.

On behalf of our Board of Directors, I would like to express our appreciation to our customers and partners for their support during the year, and to the staff and management for their unwavering commitment and untiring efforts in helping the Group to navigate its way during these highly challenging times.

I am also grateful to our shareholders for their confidence and loyalty to the Group.

Last but not least, my deepest appreciation to the Board of Directors for their invaluable guidance and contribution during the year.

I look forward to working with our stakeholders in FY2018 as the Group prepares itself for the gradual but steady ascent to the top after having weathered the worst of headwinds in the past few years.

Richard Tay
Executive Chairman & Group Managing Director


根据国际货币基金组织( I M F ) 的数据,2017年全球产出增长3.7%,比较与2016年的增长率为3.2%。欧洲、日本、中国和美国的经济激增推动了全球增长。










批发业务仍然是本集团收入的主要来源, 占总营业额的72.8%。由于整体收入下滑,批发业务的销售额为3亿2千2百40万新元,比去年同期低了0.4%。








截至2017年12月31日,经营业务之总现金净额为2 千2百70万新元,现金及现金等价物达5千4百万新元。资产总额为3 亿8 千7百50万新元,归属于股东的净资产为2 亿6 千90万

尽管市场环境充满挑战,董事会仍提出2017年派发首末期股息1.5 分每股,此提案会在2018年4 月26日的年度大会中商讨决议。

截至2017 年12 月31日股票收盘价为每股0.47 分,此股息收益率为3.2%,股息支付占集团总利润的50%。集团派发股息不仅反映了对股东回报的承诺,也为了回馈股东们对友发的支持和信任。



其他问题包括中东可能出现的全球能源市场紧张局势和中国的经济低迷。尽管中国政府已将其2018 年GDP增长目标定在6.5%左右,但经济学家指出,加强地方政府债务的控制以及与美国贸易紧张局势可能会破坏中国的计划,特别在2018年头的几个月。





通过我们的子公司Y H I P o w e r(Malaysia) Sdn Bhd)以及新设立的YHI Logistics (Malaysia) Sdn Bhd,我们计划进一步加强我们在该国的影响力 - 由于车辆需求和消费者购买力的增加,预计轮胎和电力产品市场在不久的将来会出现强劲增长。

YHI Power于2016 年成立,负责向马来西亚推广电力产品,而于2018年1月设立YHI Logistics将专注于提供物流服务。

随着中产阶级和经济的增长,预计2018 年会增长5.4%,尽管面临一些挑战,但印尼仍然是集团具有强劲增长潜力的市场。

2018年,我们还计划加强我们在印尼的3M营销策略- 多产品,多品牌和多类别- 例如开发新轮胎销售渠道,专注于优质轮毂品牌市场,并扩展我们的工业电池业务。

在2017年10月我们和缅甸合伙人签署的合资协议在当地设立公司,合作伙伴是Aung San Company。这是一家私营公司,负责进口汽车产品,如轮毂,轮胎,配件,零配件和一般商品。

新合资公司YHI Aung(Myanmar)Company Limited 将在缅甸开发和建立汽车和工业产品的营销业务。

由于商品价格下跌,澳大利亚的经济在过去几年里表现欠佳,不过今年也将是另一个前景看好的市场。根据经合组织预测,2018 年澳大利亚经济可能增长3%,而2017年为2.4%。经济改善导致消费者支出增加,反映近几个月新车销量强劲。




无论2018 年经济如何,集团将继续加强内部程序和机制,未雨绸缪,做好充分准备迎接挑战。


自2016 以来,尽管我们还是把重点放在降低运营成本上,同时我们也寻找新的增长来源。今年,我们将进行“节约与发展共存”这种双管齐下的战略,即是寻求销售增长与成本控制。这包括增加分销渠道的范围和网络,寻求合作的合资企业、商业伙伴关系或其他形式的业务合作来发展新的商业机会,以扩大我们的收入来源,并为我们的产品开拓新的市场。