Synergy House Bhd’s financial recovery in the upcoming fiscal year will largely depend on the strength of the US dollar against the Malaysian ringgit, analysts say. The furniture manufacturer, which specializes in ready-to-assemble home furniture for export markets, is projected to move from a net loss in 2026 to modest profitability in 2027, supported by favorable foreign-exchange trends.

BIMB Research predicts Synergy House will record a net loss of RM7.3 million for the fiscal year ending December 2026, but expects a turnaround to a net profit of RM0.6 million in 2027 and RM6.2 million in 2028. The company’s earnings are highly sensitive to fluctuations in the US dollar, as approximately 80 to 85 percent of its revenue is denominated in US dollars, while about 30 percent of its costs—mainly freight, storage, and advertising—are also dollar-linked. Most raw materials and finished goods are procured in ringgit, meaning a stronger US dollar relative to the local currency can enhance profit margins.

Under a base case scenario of RM4.10 per US dollar and a projected gross margin of 26.5 percent for the 2027 fiscal year, BIMB Research forecasts Synergy’s profit after tax to reach RM0.6 million. Should the ringgit weaken further to RM4.30 or RM4.50 per US dollar, profits could rise sharply to RM6.5 million and RM12.4 million respectively. Conversely, an appreciation of the ringgit would increase the margin required for Synergy to remain profitable.

Synergy House operates as a cross-border eCommerce seller and exporter, serving both business-to-business and business-to-consumer markets. The company supplies ready-to-assemble furniture to online and chain-store retailers, wholesalers, and directly to international consumers through its own online store and third-party platforms such as Wayfair, Amazon, Cenports, ManoMano, and eBay across the United States and United Kingdom. Its product range includes bedroom, living room, and dining room furniture.

BIMB Research has revised its US dollar to ringgit exchange rate forecast for the end of 2026 to RM4.10 from an earlier estimate of RM3.90. While foreign-exchange movements are critical, the firm notes that Synergy’s recovery also hinges on the stabilization of direct-to-consumer sales volumes, especially in its key export markets. Achieving a gross margin of 26.5 percent will require reductions in storage costs, inventory optimization, and an improved product mix. The company has implemented selective price increases since August to mitigate tariff and currency pressures.

Despite a challenging operating environment characterized by macroeconomic uncertainty, evolving trade policies, and cautious consumer spending, BIMB Research maintains a “hold” recommendation on Synergy with an unchanged target price of 19 sen per share. The research house cautions that the durability of Synergy’s recovery will depend on continued margin discipline and stronger sales execution.

In its second quarter ended June 30, 2026, Synergy reported a net profit of RM717,000, down from RM1 million a year earlier, while revenue declined to RM36.15 million from RM68.96 million in the previous corresponding period. The company cites ongoing challenges in its markets but remains focused on navigating these headwinds.