Thong Guan Industries Bhd Reports Lower 1Q25 Net Profit Amid Cost Pressures

PETALING JAYA, Malaysia — Thong Guan Industries Bhd, a leading manufacturer of plastic packaging materials, has reported a decline in its net profit for the first quarter of 2025 (1Q25). The company attributes this downturn to increased cost pressures following the implementation of the minimum wage in Malaysia, which has led to higher payroll and operational expenses.

In a filing with Bursa Malaysia, Thong Guan Industries disclosed that its net profit for 1Q25 fell to RM17.89 million from RM23.91 million in the same quarter of the previous year. Revenue also saw a decrease, dropping to RM319.01 million from RM344.65 million a year earlier. The plastic packaging product division experienced a 9.6% decline in revenue, primarily due to a lower average selling price (ASP) caused by the depreciation of the US dollar compared to the same period in 2024. However, the food, beverages, and other consumable products division saw an increase in revenue, rising to RM41.22 million from RM37.24 million.

Despite these challenges, Thong Guan Industries remains committed to cost mitigation strategies, including waste reduction, process optimization, and improved operational efficiency. The company is also focused on expanding its market presence across all business regions and exploring new avenues for sustainable growth.

Dividend Declaration Despite Forex Challenges

KUALA LUMPUR, Malaysia — Despite a challenging first quarter, Thong Guan Industries Bhd has announced an interim dividend of 4.50 sen per share for 1QFY2025, payable on July 18. This dividend is higher than the quarterly earnings per share (EPS) of 4.45 sen for the quarter, although it is lower than the 5.99 sen EPS reported in the same quarter of the previous year.

The company’s net profit for 1QFY2025 decreased by 25.18% to RM17.89 million, primarily due to a reduction in the average selling price of its plastic packaging products, driven by the depreciation of the US dollar. Quarterly revenue also declined by 7.44% to RM319.01 million from RM344.65 million in the corresponding period a year earlier.

Despite the weaker financial performance, Thong Guan Industries expressed confidence in achieving growth for the remainder of the financial year. The company plans to continue expanding its market presence and pursuing new growth opportunities.

Market Reaction

At market close, Thong Guan shares were unchanged, reflecting investor sentiment in light of the company’s financial performance and strategic outlook. With a market capitalization of 440,850,000 MYR and a price-to-earnings ratio of 6.24, Thong Guan Industries remains a significant player in the Malaysian packaging industry.

Thong Guan Industries Bhd continues to emphasize its commitment to sustainability, with ongoing efforts to reduce its environmental impact through recycling programs and energy-efficient machinery. The company remains dedicated to providing high-quality, reliable, and cost-effective solutions to its customers in the packaging industry.