Topmix expects resilient demand for its decorative surface products on steady renovation activity

The Sun

2 days ago

KUALA LUMPUR: Topmix Bhd expects demand for its decorative surface products to remain resilient on the back of steady renovation activity in the residential and commercial segments, said CEO Teo Quek Siang.
On the commercial front, with retail and hospitality spaces seeing more customers and positive momentum, the company expects increased renovation projects, driving demand for its decorative surface solutions.
'As a renovation industry player, we enjoy a unique position because spaces or premises constantly need refreshing,' Teo told SunBiz.
He said the government's recent support measures, such as the RM100 cash aid and temporary RON95 fuel price cuts that are intended to ease the cost of living and stimulate consumer spending, will offer modest boost to demand.
'As a business in the home improvement and renovation industry, we expect these initiatives to offer a modest boost to demand, particularly among cost-conscious homeowners.'
For the year, Teo said the company maintains a cautious optimism in the business as on-going demand for space refurbishment driven by homeowners and businesses will continue to provide a platform for growth.
He noted that economic downturns do not usually hit TopMix as hard as they do property or construction sector, which fluctuate with economic cycles.
'Our renovation sector maintains constant demand because people will still need to maintain and upgrade their spaces, whether it is homeowners or businesses who need rebranding.'
While some businesses may move out, Teo said, the new tenant comes in and renovates the space to their requirements.
'This on-going cycle ensures consistent demand for our premium decorative surface solutions materials. In many ways, when the economy slows, we often see more renovation activity as customers choose to renovate rather than relocate or invest in new premises.'
Topmix experienced a sequential decline in sales and gross profit in the first quarter of 2025 (Q1'25) despite strong year-on-year growth in revenue and profitability.
For Q1'25 ended March 31, 2025, its net profit more than doubled to RM3.09 million from RM1.27 million in the same period last year, supported by improved gross profit margins from favourable foreign exchange movements.
Topmix recorded revenue of RM22.07 million, up 14% from RM19.36 million a year earlier, driven by strong sales of high pressure laminate (HPL) products and a surge in PVC plywood and melamine-faced chipboard sales.
However, on a quarter-on-quarter basis, revenue fell 19% from RM27.33 million in Q4'24 and net profit declined 27% from RM4.25 million, reflecting the seasonal slowdown in renovation activity during festive periods.
Teo said Topmix fully acknowledges that business activity tends to slow during festive seasons. 'While this is inevitable, we have structured our approach to ensure consistent performance year-round.'
He stressed its second-half results tend to be stronger, but the strategy is not limited to just certain quarters.
'What we have is a long-term approach that is executed and implemented consistently.'
Operationally, he said, Topmix uses historical sales data to accurately forecast demand and optimise inventory levels, helping to control holding costs, prevent storage constraints and ease cash flow pressure.
On the marketing front, Teo said not many industry players can produce catalogues as frequently as Topmix due to high production costs. 'We release new, trend-driven catalogues once every two years, keeping our brand relevant and aligned with the latest design trends.'
On foreign exchange strategy, Teo said the company adopts a prudent hedging approach to minimise exposure. 'We closely monitor currency fluctuations and use forward contracts to mitigate risks from foreign currency movements.'
He added, 'Rising input costs are unavoidable due to global raw material fluctuations and supply chain pressures. While we strive to manage costs efficiently, with only minimal price adjustments, some increases are reflected in our pricing to ensure continued product quality and service standards.'
Teo said the company works closely with five major original equipment manufacturer suppliers under exclusive arrangements for its HPL products. 'In the event of any disruption with our current suppliers, we can switch to alternative manufacturers with minimal impact.'