On July 10th, Gelunhui announced that on July 10, 2024, Chop Chin Huat, an indirect wholly-owned subsidiary of the company (as the buyer), and Lestari Duta (as the seller) entered into a sales agreement to acquire the site with an area of approximately 162,405 square feet in the Weibei County area of Penang, Malaysia, at a price of 11.86 million ringgit.
The acquisition is in line with the company's business strategy of further enhancing its distribution and sales capabilities through investment in other infrastructure. As the directors are well aware and believe, the company intends to build its own warehouse for its business development. Brand owners generally prefer distributors who can deploy their own warehouses and provide sufficient storage space for their products. Therefore, the acquisition and the construction of new self-owned warehouses will help the company obtain more distribution rights in the future.
Generally, in addition to existing self-owned warehouses, the company also leases storage space from warehouse and logistics service providers according to demand standards for storing inventory and delivering it to customers. As these external service providers need to accommodate other market participants in Malaysia's food and beverage distribution industry, they must share public facilities with other users, such as loading and unloading platforms. Therefore, the Group must comply with the loading and unloading schedule of external service providers, which may not be consistent with the Group's product delivery schedule and may affect delivery times and operations. In addition, the Group is also occasionally restricted by the availability of storage space of these warehouses and logistics service providers. Therefore, delivery schedules and operations may be affected. In view of this, the directors believe that the acquisition and construction of new self-owned warehouses can improve the company's operational efficiency and resilience.