Fu Yu Corporation Limited AGM 2026: Detailed Responses to Shareholder Questions

Date of AGM: 30 April 2026
Location: Raffles Marina, Singapore

Key Highlights from the Report

• Internal Review & Strategic Direction: The Board has been conducting an ongoing internal review focusing on operational efficiency, governance, and long-term competitiveness. The strategic direction remains largely unchanged from the 2023 review, but new initiatives have been introduced, including reducing material waste, optimizing processes, lowering costs, and consolidating the manufacturing footprint. Any material findings from this review will be announced to shareholders.
• Factory Utilization & Consolidation: Utilization rates at Malaysian and Chinese factories are currently between 40%-50%. In July 2025, the company liquidated its under-utilized Zhuhai facility, consolidating production in Dongguan, China to enhance overall efficiency. The Group will continue to monitor utilization and may take further consolidation actions if necessary.
• Impact of Global Geopolitics and Commodity Prices: The ongoing war in Iran and issues around the Straits of Hormuz have not had a material adverse impact on operations or financial performance so far. The Group has implemented supplier diversification and cost optimization strategies to mitigate risks, but is closely monitoring energy prices and raw material availability.
• Dividend Policy: The Group reaffirms its commitment to returning at least 50% of profits as dividends to shareholders. There has been no change to this policy, though dividends have not been paid for several years due to consecutive losses.
• Board Composition and Governance: Questions were raised about the nationality and experience of directors. The Board emphasized that appointments are based on merit, experience, and expertise, not nationality. All directors are subject to Singaporean law, including fiduciary duties and statutory obligations. The Board acknowledged that not all directors have previous SGX-listed board experience, but bring diverse backgrounds in manufacturing, finance, M&A, and international business. All directors are required to undergo relevant training for listed companies.
• Directors’ Fees and Accountability: The proposed aggregate director fees for FY2025 (S\$118,615 pro-rated) and FY2026 (S\$232,000) are shared among four independent directors instead of three. This represents a reduction in per-director fees. The Board defended maintaining these levels, citing increased workload from transformation initiatives and improved operational performance (manufacturing revenue up 6.8%, gross margin up from 13.5% to 14.5% in FY2025). Management remuneration was reduced from S\$3.27 million (FY2024) to S\$2.48 million (FY2025).
• Audit Fees and Change of Auditors: Audit fees increased substantially (from S\$212,000 to S\$271,000), mainly due to expanded audit scope related to investigations into Fu Yu Supply Chain Solutions Pte Ltd (FYSCS), legal claims, and the winding down of Zhuhai operations. Baker Tilly, the external auditor since FY2023, will not be re-appointed. The change was mutually agreed upon, considering evolving business needs and audit fee considerations.
• Staff Costs & Operational Discipline: Staff costs rose from S\$35.8 million to S\$37.8 million to support improved manufacturing operations and revenue growth. The Group continues to focus on cost discipline, automation, and operational efficiency, with ongoing reviews of manpower and resource allocation.

Important Issues for Shareholders

• Manufacturing Consolidation and Utilization: Under-utilization (40%-50%) may signal overcapacity, but ongoing consolidation (e.g., closure of Zhuhai) could lead to improved profitability and operational leverage.
• Dividend Resumption & Financial Performance: While the Board remains committed to paying at least 50% of profits as dividends, no dividends have been paid for several years due to losses. However, improved operational metrics (revenue and margin growth in core manufacturing) may indicate a potential turnaround.
• Audit & Governance Developments: The ongoing internal review, expanded audit scope, and change of auditors may be price sensitive, as these actions suggest the company is actively addressing past governance and operational issues. The outcome of these reviews and investigations could significantly affect investor confidence.
• Cost Structure and Management Accountability: The Board responded to concerns about director fees and management remuneration by noting a reduction in total management pay. Shareholders should monitor whether cost discipline continues and if this translates into sustained profitability and dividend resumption.
• Geopolitical Risks: The company currently sees no material impact from the Iran war or Straits of Hormuz disruptions, but remains vigilant. Prolonged issues could affect costs and supply chains.

Potential Share Price Catalysts

• Operational Turnaround: Improved core manufacturing performance and a streamlined footprint could lead to profitability and dividend resumption, positively impacting the share price.
• Resolution of Legacy Issues: The completion of internal investigations and ongoing governance improvements may restore investor confidence.
• Audit and Governance Actions: Changes in auditors and increased audit scrutiny may unearth further issues or confirm the company’s progress, both of which could move the share price depending on outcomes.
• Management & Board Actions: Continued cost discipline and alignment with shareholder interests will be closely watched by the market.

Disclaimer: This article is based on the company’s published responses and does not constitute investment advice. Investors should review the full AGM document and consider their own circumstances before making investment decisions. The information may be subject to change based on future developments, regulatory actions, or further disclosures by Fu Yu Corporation Limited.

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