Digi continued to register notable milestones, with our 4G Plus network being one of the fastest growing networks in Malaysia, capable of delivering consistent LTE speed around 10Mbps 80% of the time. Meanwhile, rapid LTE 2600Mhz and LTE 900Mhz deployments expanded Digi’s LTE-A coverage to 49% of the population, making us the frontrunner for widest LTE-A network coverage nationwide.
Postpaid ARPU levelled to RM77 on the back of a larger postpaid subscriber base supported by sturdy demand for our new postpaid plans. Prepaid ARPU steadied at RM32, with higher contribution from prepaid internet revenue.
Palette has moved into the medtech space with the significant investment made over the past few years on the development of imedic, the mobile health system. imedic enable patients to have wireless medical devices at home or anywhere, to regularly make measurement and upload the vital sign data to the Cloud. This would allow doctors from anywhere in the world to have access to the patient’s data 24×7 to review and provide online consultation to the patients. More than 15 devices have been developed to connect to imedic including CPAP machines for sleep apnea patients. The Company will continue to invest in the innovation and development of its next generation of imedic with extensive artificial intelligence (AI) technologies performing analytic on the “Big Data” of the patients and make useful recommendation of diagnosis and treatment plan to the doctors and patients.
The Company has effectively combined the latest innovative technologies: medtech, AI and Big Data in imedic. The power to be unleashed from these 3 technologies could be enormous. In additional to its early adoption by hospitals and doctors in the China market and other Asian countries, the Company has made successful penetration into the Russia market. The Company has recorded profit last quarter and Q1 FY2018. The Board of Directors is in the opinion that the Company will be profitable for the current FY.
“For the manufacturing side, for the last three to four years, we have invested probably almost RM1 billion to expand the capacity to [produce] 350,000 tonnes [of stretch films per year].”
He said the group’s new stretch film facility in Arizona in the US is on track to commence its operations early next year. The two lines at the US facility, he said, will take about two years to be fully utilised. At full utilisation, the plant will be able to produce up to 30,000 tonnes of stretch film per annum. With this new plant, Lim said the group expects its sales in the US market to increase further.
Scientex now has a total land bank with a gross development value (GDV) of RM11 billion, which includes completed projects with a RM3.2 billion GDV and ongoing projects worth RM1.5 billion. The remaining RM6.3 billion worth of land will be used for future projects which can last the group for up to 10 years, said Lim.
“We originally planned to launch our biscuit products this month, but we wanted to make a bigger impact by launching the entire series on the market. We still have another few products to finalise and we will be launching them next month.”
“We can easily add machines to our existing four production lines for our potato products. Adding one [machine] could boost our revenue probably another 5% to 10%. But in order to have more growth, we have to venture into another [new] segment.”
“For this financial year (FY18), it is very difficult for us to estimate our bottom line due to the rising cost of raw materials and labour. This year, we see a rise in sugar prices, as well as packaging cost due to higher paper prices. And the price of paper is expected to rise by another 8% in the near future as some China paper mills had stopped production on environmental grounds, resulting in supply shortage.”
“Although we absorb some margin loss, all of us are still making money,” he said, adding that raw materials account for 60% of the group’s production cost.
“Our bottom line was previously very much affected by unrealised foreign exchange losses due to the volatility of the Vietnamese dong and the US dollar.” YSPSAH purchases a good 60% of its raw materials in US dollars. Lee said its exports, which are also denominated in US dollars, helped mitigate the situation.
“Our animal use drugs segment faces strong headwinds”, he said, since this segment, which caters to livestock and aquatic creatures, took a hit after the Chinese embargo on Vietnamese swine took place. Vietnam is one of the biggest pork producers in Asia, and the largest within the Asean region. The biggest buyer of Vietnamese pork used to be China, up until political tensions between both countries led to an import ban in November last year. “We have been trying to reduce our reliance on the domestic market there, and instead to focus on exporting products from there.”
The Vietnamese plant is running at a rather low utilisation rate of 40%, where it manufactures over 50 registered products that are distributed to more than 1,200 clients through 35 YSPSAH sales representatives to date. Lee said this is not its full range of products just yet. By year end, YSPSAH aims to have a total of 60 products registered and launched in Vietnam.
The group now wants to shift its focus to retail banking, which had already contributed close to 50% to overall revenue this year.
“In this five-year programme from 2016 to 2020, we have allocated about RM300 million to spend not only on IT (information technology) but also with a view to improving the performance and delivery of our retail banking operation. So it’s actually quite a substantial improvement. I think we are well within our target to meet the 40% goal for Islamic banking by 2020 [set] in the Malaysian financial sector blueprint.”
“The positioning of the bank will be enhanced because the bank is at the apex [of the corporate structure], and hence [it holds] all the assets of the entities underneath it so the size will be enhanced as well. The bank will also have a direct access to the capital and equity market which, again, profiles the company as a much stronger entity.”
“With the ASP licence obtained from MCMC, MPay Mobile has become the latest mobile virtual network operator (MVNO) in Malaysia supporting a wide spectrum of services to the public nationwide, including the latest high-speed broadband 4G network.”
“Enabling Asia is a mobile virtual network aggregator, who has a wholesale MVNO agreement with one of four network operators in Malaysia, offering a complete network product and services to MVNOs.”
“The aim is to bring more convenience and accessibility for customers who are located at remote areas with difficulty to access to bank branches, or who intended to move away from traditional banking at branches towards online and mobile banking.”
On Malaysia Airlines, Bellew pointed out that success is just within its grasp. Just another 4%-5% in revenue monthly and it should move to profits, he added.
“It is Ireland’s greatest company. They need my help and there is a big challenge. It is a form of national service,” he said in a personal statement why he was rejoining the Irish low-cost carrier.
“Freedom of travel in air is characterised by nine different levels of freedom. Asean has implemented perfectly the first four levels of freedom, [while] the fifth freedom is in progress. The ninth level of permission, which is the final spectrum of freedom of air, essentially gives an airline the freedom to travel in the domestic destination of a foreign country, not just the capital city itself. We are halfway to full freedom of flight in the air. There is an understanding among the Asean countries that this can be done by the year of 2020, but as a think tank, we observe that the progress has been slow, and a lot of obstacles at regulatory and policy levels still exist.”
Ali noted that there are no national supportive policies in certain large countries in the region, which allows a foreign carrier to freely navigate across the country. “And then there are of course government-owned airlines operating in different countries, which also impose restrictions on private airlines originating from the same region to fly without permission,” he said. Therefore, Ali opined that Asean governments should stay away from aviation businesses over time.
The provident fund, which endears itself to many above 55, warned that it may not be able to keep up with the current rate of dividends if there are continued restrictions on its efforts to invest outside Malaysia.
The returns from its investments overseas outweigh the proportion of money allocated. For instance, as at June 30 this year, the returns from overseas investments accounted for 32.5% of the EPF’s total investment income. This is despite overseas investments making up only 29% of the total investment assets of the fund.
“If there is a minimum wage increase next year, it would likely result in a cost-push inflation as businesses are likely to pass on the rising costs to consumers. It would also contribute to demand-pull inflation at the back of income growth. The increase in minimum wage will cascade up to other income groups and higher wage across the economy.”
“We will see another round of inflationary pressure [if minimum wage is raised], but it’s crucial to move Malaysia out of the low-wage industries. We need to move to higher value products and services. The increase in minimum wage will force manufacturers to seek out for higher value-added jobs and activities rather than the low value-added [jobs], high volume output.”
Noting that the minimum wage-earning workers in Malaysia are largely made up of foreigners, she said an increase in the wage rate could spur Malaysians to take on more of these jobs, and thereby help reduce unemployment in the country.
“A hike will add to the costs of doing business, which may mean more people in the lowest strata losing their jobs,” Wan Saiful said, adding that an increase in wages should come only after there is an increase in the productivity level.