Is the future outlook bright for Lotus (LOTUS, 8303)?

Lotus KFM has actively promoted a diversified business strategy in recent years to expand into new areas, reduce the risks of a single business, and move towards sustainable development.

Since its establishment, Lotus has focused on wheat processing and related product trading, with main products including wheat flour, premix flour, cassava, and corn starch. With years of industry experience, the company holds a significant position in the flour market in Malaysia.

Despite the challenging global economic environment, the company achieved revenue of 58.5 million ringgit in the 2023 fiscal year, a decrease from 66.079 million ringgit in 2022. However, it still demonstrates resilient performance, with 2024 performance expected to remain steady.

In order to seek new growth opportunities, Lotus KFM entered the forestry planting industry in Malaysia in 2022, acquiring forest planting land in Perak and Kelantan.

At the same time, the company actively develops bamboo planting and processing business, seizing the opportunity in the sustainable materials market by utilizing the rapid growth and versatile characteristics of bamboo. The company expects that the planting industry will start contributing positive profits to the group by 2027, becoming a new profit growth point.

Diversification strategy helps Lotus KFM reduce reliance on a single business, enhancing the ability to withstand market fluctuations. Although the company's overall operating profit for the 2023 fiscal year decreased to 2.374 million ringgit, a 20.6% decrease from 2.989 million ringgit in the 2022 fiscal year, this is mainly due to the initial investment in the planting industry. With the planting industry gradually entering the harvest period, the company's profitability is expected to improve.

As of October 29, 2024, Lotus KFM's stock price was 0.195 ringgit, slightly recovering from the 52-week low of 0.16 ringgit, demonstrating market recognition of the company's diversification strategy.

Looking ahead, the author believes that Lotus KFM will continue to advance its business diversification and sustainable development strategies.

Whether through the expansion of new product lines or the deep cultivation in the field of green materials such as bamboo planting, the company is committed to creating long-term value for shareholders. With the gradual entry into the harvest period of the planting industry and the steady expansion in the sustainable materials field, Lotus KFM is expected to achieve even more brilliant performance in the coming years.

Let's encourage each other.