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Cheung Woh Technologies names new CEO as Q2 earnings slump 87%
LAW Kung Ying, the chief executive of Mainboard-listed Cheung Woh Technologies, will retire from the top job on Feb 28, 2020 due to health reasons. He will be replaced by his brother Law Kung Ming.
The leadership change comes as the hard disk drive components maker faces hard times. Cheung Woh saw earnings fall 87.4 per cent to S$106,000 for Q2 FY2020 ended August, hit hard by weakness in sales of its HDD products. This translates to an earnings per share of 0.04 cent, down from 0.28 cent a year ago.
The company's turnover for the quarter fell 44 per cent to S$12.9 million, due to lower sales of certain HDD components, namely, baseplates, air-combs and VCM plates. Its precision metal stamping (PMS) business also faced lower customer demand.
Cheung Woh sank into the red for H1, with a loss of S$476,000, compared to the S$1.5 million profit a year ago. Turnover for H1 was 43.1 per cent lower on year at S$25.3 million.
Net cash flows from operations fell 11.6 per cent to S$3.1 million for Q2, partly due to a decrease in trade payables.
Cheung Woh expects sales for HDD components to be lower in the coming months, while the PMS segment is set to continue facing "soft market demand" due to global trade tensions.
"The group has diversified into various industries and will continue to explore new business opportunities by leveraging on the group's core competence," Cheung Woh said in its earnings results on Thursday.
The company has a war chest of S$22.1 million cash as at end-August. Its debt stands at S$2.6 million.
Shares of Cheung Woh closed at S$0.14 on Thursday, down 1.4 cents.