Transcription of Finance News Network Interview with Harris Technology Group Limited (ASX:HT8) Managing Director, Garrison Huang
Carolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network and joining me from retailer, Harris Technology Group Limited (ASX:HT8) is Managing Director, Garrison Huang. Garrison, welcome to FNN.
Garrison Huang: Thank you for having me.
Carolyn Herbert: Can you start by giving us an introduction to Harris Technology Group?
Garrison Huang: Harris Technology Group with an ASX code of HT8, HT8 in fact is a result of a merge last July, from formerly Shoply Limited with Anyware Group, Anyware Corporation and Harris Technology e-commerce business. So there is three businesses formed, there’s a new business. After the merger, we changed the name to Harris Technology Group, again, with the ASX code of HT8.
This business consists of two streams, B2B stream and the B2C stream. The B2B stream is represented by Anyware Corporation’s distribution business. Anyware is the leading IT and the computer accessories distributors in Australia.
Carolyn Herbert: And Garrison, now to operations, can you tell us about each of your business divisions and how they contribute to group sales?
Garrison Huang: Well, as I mentioned before that we have two streams of business. One is the B2B, the distribution business and the other side is the B2C business. Currently, our majority sales do come from our B2B business, that’s the distribution importing business. We are in the middle of also launching a new operation based in China, that we will talk about a little bit more about it. The business, after merging last year, we have made a lot of changes to the business. We reduced a lot of overheads and cut down a lot of unnecessary head counts, as well. So we ensured we stopped the cash burn, previously happening to the business and started a much more sustainable – basically ensured the sustainability of the business.
Carolyn Herbert: Now to strategy and growth. Can you tell us how you intend to grow sales in a competitive market?
Garrison Huang: Yes, we have a unique business strategy we call the M2C. Many people would understand B2C, B2B or C2C, but probably don’t understand what M2C is. What M2C stands for is manufacturer to consumers. This is the business we wanted to launch. That we wanted to take advantage of our know-how, our history in the distribution importing business in the past, to launch this manufacture to consumer direct model, in our future development.
Carolyn Herbert: So what products are you tending to focus on and why?
Garrison Huang: The product range we were trying to launch initially. So certainly, we’ll offer the products, non-competing product range, against our B2B business. Because our B2B business is a very significant business size, we certainly don’t want to cannibalise this side of the business ourselves. So we will launch the business, again non-competing business, against our existing B2B business. So the range we’re looking at are the mobile phone accessories, toys, health products and to a larger extent maybe later, to home and garden products type of range.
Carolyn Herbert: And Garrison, now to your financial results. What were the highlights from your first half results and are you fully funded for expansion plans?
Garrison Huang: Well I’m happy to inform that we have delivered EBIT about more than $0.5 million, for the first previous three quarters, in the finished financial years. And we have generated cash flow to sustain our business. This is a major turnaround from the previous years of loss of the listed entity.
Carolyn Herbert: A more general question now Garrison. How do you see the arrival of Amazon (NASDAQ:AMZN) in Australia?
Garrison Huang: We look at Amazon this way. Amazon is the online shopping mall, such as the Westfield Shopping Mall, only in a different way. Where the e-tailers, the smaller e-commerce business can conduct business on that platform. So, we welcome Amazon’s entry to this country. We feel that, as a business, an e-commerce business, we can take advantage of Amazon’s entry in this country. Amazon will, I guess, deliver a very good customer understanding of e-commerce as well as enhance the e-commerce, I guess popularity, in this country.
So we want to take advantage of Amazon’s massive marketing power and very strong platform, by conducting business on Amazon also including EBay (NASDAQ:EBAY) platforms. So we don’t see Amazon as a competitor and where we see Amazon is in fact, a catalyst to our business.
Carolyn Herbert: Very interesting and finally Garrison. Where would you like to see the company 12 months from now and over the longer-term?
Garrison Huang: We would hope that we will have seen some strong business growth in our M2C business, cross boarder business division in China in 12 months time. And see some nice traction and welcome us in the market.
Carolyn Herbert: Garrison Huang, thanks for the update.
Garrison Huang: Thank you Carolyn.