Pensonic charges up for profitability

IF you grew up in Malaysia, chances are you will be familiar with Pensonic products – from the fan you turned on during the hot afternoons to the oven your mum used for baking on the weekends.

Despite being a renowned brand for a very long time, Pensonic Holdings Bhd went through some tough times recently.

In November 2023, its share price peaked at 80 sen, but in April last year, it reached a low of 43 sen. In the first quarter of 2024, the group reported RM42,000 in profit compared to RM336,000 a year earlier.

The group undertook aggressive restructuring earlier this year, with a renewed management that is keen to take the bull by its horns and return the group to profitability this year.

Group chief executive officer Datuk Dixon Chew Chuon Jin tells Starbiz 7 the restructuring became a necessity as the new management began identifying what needed to be changed.

Dixon says ageing stocks, stock-keeping, sales strategies as well as its manufacturing needed a revamp.

“At that point, our gearing and borrowing was quite high. We also had stocks in the warehouse.

“One of the first things we did was look at these stocks and decide on whether they could be sold. We also initiated campaigns to clear the stocks, and once we did, our cash flow began to improve,” he says.

Pensonic sold off 60,000 ovens over three months through eCommerce channels, cementing the fact that there was a market for it.

Dixon says changing the mindset was the next thing they worked on.

Having a legacy that began many years ago had also muddied certain grounds when it came to making decisions and implementing plans.

Previously, top management was left to make the decisions, but now Dixon says he wants the entire team to begin taking responsibility and contribute towards helping the group become successful again.

“We also created a structure, whereby instead of running on sales, the leaders will be tasked with certain product groups.

“They will identify which product group is doing well or isn’t, and why. Then they will look for solutions or ways to market those products better,” he says.He says this team will also be tasked at looking at categories the group does not have a strong presence in yet.

Pensonic has more than 10 product categories and will be looking at enhancing its personal care category like hair dryers, electrical shavers and beauty products, as well as major appliances like fridges.

“For the domestic market, our revenue was mainly from small home appliances like kettles, toasters, blenders and such. We want to continue focusing on the fridge and air treatment categories next year,” he says.

Dixon also hopes Pensonic can leverage on the US-China trade war.

He says Pensonic noticed many changes in the supply chain side and manufacturing bases as more companies shifted their focus to South-East Asia.

“We decided to invest and restructure our manufacturing hub to cope with the demand and geopolitical changes. In the past two years, after investing into specific areas, we managed to secure a lot of orders and new businesses for our factories,” Dixon says.

Pensonic’s main factory in Penang was upgraded with an investment of between RM8mil and RM9mil. The group will continue looking into expanding its automated equipment as demand increases, he adds.

Pensonic exports to more than 25 countries through dealers, wholesalers and distributors. Malaysia accounts for about 65% of raw sales and the rest is from international business.

Dixon says that in 2025, the group will focus more extensively on some countries, like the Philippines.

“We may consider expanding there or switching up our business model. For Indonesia, we are looking at switching from traditional models to online channels,” he says.

He acknowledges that with so many different electrical groups in the market today, competition is indeed stiff.

“We realise that the customer is key. Once a customer remembers a particular brand, they often go with it,” he says.

Dixon says for the newer, younger customers, Pensonic will look at re-inventing itself so that it can meet their needs.

“For small appliances, Pensonic only has between 10% and 20% of the market share in Malaysia. There is still plenty to capture.

“Branding and tapping into the newer social media applications will help,” he says.

Dixon stresses that Pensonic is looking to regain the traction it once had by returning to profitability.