Covid-19 pandemic derails Japanese golf manufacturer Honma’s business plan even as second-half sales outlook improves

Honma Golf, a Japanese premium golf club manufacturer backed by Chinese entrepreneur Liu Jianguo and Thailand’s biggest conglomerate, said the coronavirus pandemic will derail its business plan after lockdowns and travel curbs hit sales.

The Hong Kong-listed firm expects to take a year longer than expected to achieve its target of doubling sales by the financial year ending March 2022, chief financial officer Bian Weiwen said. Changes to its product lines and higher costs to develop new markets also hurt its bottom line.

“Our plan was to sharpen our focus on the premium performance products segment, grow our non-golf club business and expand our market share in the US,” she said in an interview with the South China Morning Post. “The pandemic will delay [our targets] by a year.”

Under its three-year business strategy, Honma aimed to increase sales to US$500 million by March 2022 from US$270 million in 2019 and restore its gross profit margin to 20 per cent. It was also banking on growing its non-golf business such as golf accessories and apparels to 40 per cent from 10 per cent of sales.

Instead, the pandemic has slammed many Asian and western nations Honma was counting on for revival. More than half of the respondents in a GolfNow survey of some 300 North American golf club operators spent the spring and summer without their second-biggest asset, the clubhouse, while almost 70 per cent had reduced F&B operations, according to a report published this month.

Even so, the survey showed more than 81 percent of facilities reported rounds increased year to date (through September), including 36 percent where revenue was up more than 25 percent during the peak summer season. Honma expects the industry to gradually return to new norm, following a steady and visible increase in the sport, and rounds played in most of its active markets, according to its November 27 report to shareholders.