MARC has assigned short and long term-ratings of MARC-2ID and AID respectively to Hytex Integrated Berhad’s (“HIB”) Murabahah Underwritten Notes Issuance Facility /Islamic Medium-Term Notes (“MUNIF/IMTN”) of up to RM100.0 million. The ratings reflect the group’s profile as an integrated garment manufacturer; long established relationship with a major international sports brand and superior product quality which sets it apart from other mass/low cost producers. The ratings are also underpinned by HIB’s stable financial profile and balanced exposure to the export and retail markets which somewhat insulates the group from business concentration risk.

The group’s operations can be divided into three segments – OEM (Original Equipment Manufacturing), ODM (Original Design Manufacturing) and OBM (Original Brand Manufacturing). OEM products are catered for the export markets with Japan constituting its largest export destination. For the retail side, ODM and OBM products are distributed via the group’s own retail concept stores and consignment counters.

Moderating factors to the ratings include the inherent risks of the textile industry and the group’s moderate liquidity position. Operating profit margin remained in double digits although marginally lower as compared to the previous year.

Moving forward, revenue will largely be driven by its OEM business underpinned by strong demand from its OEM customers and to a certain extent from its new China plant, expected to be operational by beginning of 2006.