Micro-motor manufacturer Johnson Electric Holdings is looking to its new trading and venture capital divisions to boost sluggish turnover growth, but analysts warn that higher revenues will come at the cost of lower margins.
'This year, trading and venture capital will be a significant part of our business and contribute to our profits. You'll see a big increase in their revenues,' said executive vice-president Paul Tong Hon-to.
Tai Po-headquartered Johnson pioneered the local manufacture of high-quality micro-motors before moving its manufacturing plants to China from where it now supplies micro-motors for use in automotive components, home appliances, power tools, business equipment and audio-visual products.
However, revenue growth has recently slowed, prompting negative stock calls from some analysts, and triggering diversification into new divisions Johnson Electric Trading and Johnson Electric Capital.
Omitting full-year contributions to its latest results from the start-ups, Johnson's turnover grew 9 per cent to US$1.14 billion for the year to March.
Last fiscal year, Johnson's net profit grew 22 per cent to US$142 million.
