Wah Seong Corporation Berhad Annual Report 2021 41 MANAGEMENT DISCUSSION AND ANALYSIS The ITS segment had an order backlog of RM28.82 million at the beginning of 2021 and finished the year with an order backlog of RM54.10 million. Discussion of anticipated or known risks that may have a material effect on, among others, the sustainability of the Group’s results or operations, financial condition or liquidity Global economy and politics remain volatile and such macro factors may have unforeseen negative spillover effects on the Malaysia economy. Despite optimism that markets are expected to normalise as we move towards acceptance of Covid-19 as endemic, global uncertainties may stunt the recovery of the Malaysian economy, which in turn may affect the main economic pillars such as construction, infrastructure and mining. Rising interest rates could lead to higher input cost resulting in cost escalation which may be difficult to pass on through the supply chain. Discussion on expectation of future results Malaysia is expected to continue to roll out major infrastructure development and construction activities such as MRT 3 in order to keep the engines of the economy chugging forward. Industry players are eager to move on after two long years of the Covid-19 pandemic, hence there is optimism of positive growth in 2022. Malaysia’s position as a net exporter of crude and palm oil will cushion the country’s fiscal exposures during this period of significant global uncertainty, thereby possibly attracting further investments for funds seeking a more stable and resilient outlook. The ITS segment will continue to focus on our core activities of distribution of building materials and construction equipment to key players of the construction and infrastructure industries. Growing investments in the digital infrastructure of Malaysia both by the public and the private sectors will result in stronger demand for our power system solutions such as generator sets.
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