Unique Fire holding up well with expansion underway

Unique Fire Holdings Bhd is back on investors’ radar, showing a strong rebound toward its 52- week high of 46 sen. Investors are mostly positive on the ACE Market listed counter to “move to the Main Market of Bursa Malaysa.

The company made an aggregated consolidated profit after tax (PAT) of RM29.04 million over the past five financial years. It reported a PAT of RM8.13 million for the year ended March 31, 2024 (FY2024), RM2.46 million for FY2023, RM5.64 million for FY2022, RM5.32 million for FY2021 and RM7.48 million for FY2020.

Unique Fire said it has recorded a healthy financial position with positive net cash flow from operating activities since its listing two years ago. It also has sufficient level of working capital for at least 12 months, and no accumulated losses.

As at end-March 2024, its current ratio stood at 6.30 times, with current assets at RM70.71 million, and current liabilities at RM11.23 million. It had cash and bank balances of RM14.98 million, with fixed deposits with licensed banks at RM7 million, while borrowings totalled RM9.84 million as at end-March.

The company is on track with its expansion plans after using about 72% of its total initial public offering proceeds. The addition of its two new manufacturing lines which are anticipated to begin operations in the first quarter of 2025 and will significantly improve our operational efficiency, increasing its total production capacity by 220% to well above 210,000 cylinders. The company added that it has a presence in Johor and are currently paving the way for entry to Penang.

Upon the successful completion of the proposed transfer, Unique Fire will continue to capitalise on new growth opportunities in the fire safety and protection industry, which include electric vehicle blankets. It is also gearing up to expand a key offering into international markets via a joint venture.

Unique Fire has three business segments: assembly, which accounted for nearly half of its revenue for the first quarter ended June 30, 2024 (1QFY2025); manufacturing; and distribution. Given the company’s dependence on the construction and property sectors, a lull in these industries could limit demand for the company’s products,

Meanwhile, any increase in steel prices may escalate the cost of its products and affect margins. Unique Fire is a beneficiary of the strengthening of the ringgit against the US dollar, as the company sources raw materials from overseas markets in US dollars for its assembly division.