Company Notes 2017.11.03

Globetronics Technology Q3 FY2017 Results

The Group expects to see significant improvement in business and volume loadings for all our major product portfolios for the rest of the year 2017. This will enable the Group to register a stronger financial performance for the rest of the FY.

The Group will continue to focus on escalating up the value chain and riding on the R&D initiatives in new products design and development with our key customers. This initiative is expected to result in the manufacturing of additional new products in the year 2018.

SWS Capital Q4 FY2017 Results

The acquisition of ELE enabled the Group to diversify into the manufacturing and trading of plastic wares, utensils, and goods. In view of the favorable prospects of the plastic wares division, the Board believes that the ELE Acquisition is an attractive business venture. The Group is exploring business complementation between dining sets division and plastic wares division for enlargement of products base.

DKSH Malaysia Q3 FY2017 Results

The client and customer portfolio remains well diversified and supported by strong sales, marketing and distribution infrastructure with a capillary reach. With a scalable business model, the Group offers a comprehensive portfolio of services along the entire value chain, customized and tailor-made to clients’ specific needs. Furthermore, operational risk management processes and controls, supported by an industry leading IT system, continue to support the existing businesses as well as new clients.

Two market trends additionally support a positive medium-to-long-term outlook for the Group. Firstly, the growing middle class in Malaysia supports the demand for consumer goods and healthcare products. Secondly, manufacturers increasingly focus on core competencies and seek specialized service providers in order to grow the market for and with them.

Sasbadi Q4 FY2017 Results

The PBT for the preceding FY’s corresponding quarter included a bargain purchase gain of RM4.315 million arising from the acquisition of 100% equity interest in United Publishing in August 2016. In addition, the LBT for the current financial quarter was mainly attributed to the drop in revenue, coupled with higher operating costs recorded by the Group mainly due to the consolidation of the United Publishing Group’s full quarter’s results, impairment loss on trade receivables, and increased interest expense arising from higher gearing.

Kronologi Asia Q3 FY2017 Results

By product category, the Enterprise Data Management (“EDM”) infrastructure technology segment continued to dominate the Group’s revenue, amounting to RM97.230 million or 95.67% of total revenue, with Managed Services making up the balance.

The Group’s performance for the nine (9) month ended 30 September 2017 (“9M 17”) has already exceeded that of the whole of the financial year ended 31 December 2016 (“FY2016”) both in terms of revenue and net profit. A major factor behind the increase has been the full consolidation since 4 October 2016 of Quantum Storage (India) Pte Ltd [QSI] (previously a 20%-held associate). The contribution from QSI is expected to contribute steadily to the Group for the rest of the year. In view of these factors, the Group expects its financial performance in FY2017 to be better than that of FY2016.

Subsequent to the quarter under review, the Group announced on 9 October 2017 that it has proposed to acquire the entire share capital of Quantum Storage (Hong Kong) Limited. The acquisition could expand the Group’s market presence in North Asia, namely Hong Kong and Taiwan, which potentially serve as gateways to Greater China. The Group believes that upon regulatory and shareholder approval, this acquisition will contribute to revenue and profit, especially from FY2018.

SLP Resources Q3 FY2017 Results

Towards year end, we expect to receive more orders from customers to cater the festive spending habits. Going forward, with our on-going capacity expansion plans, engaging and finalising with brand-owners on new projects, we expect to see further positive growth in revenue.

Drones, clones and chocolate could be the answer for palm oil planter

A lack of plantation workers means fruit can’t be harvested on time, lowering extraction rates and oil quality. United Malacca uses mechanical grabbers to collect fruit bunches, a typically laborious task in hot and humid conditions. It’s also mechanized fertilizer and herbicide application while drones are used for aerial surveillance.

United Malacca plans to diversify into crops including cocoa, coffee, coconut and stevia in Indonesia, Benjamin said, as it seeks to mitigate risks from being an upstream business and capture rising demand for those commodities. The company acquired a 60 percent stake in PT Wana Rindang Lestari to help widen its earnings base and reduce its dependency on palm oil.

United Malacca is also betting that its young trees will boost profits into 2019, according to Benjamin. Oil palms typically start producing fruit at the age of three, with yields peaking when trees are between 10 years and 18 years old then gradually declining, he said. Most of United Malacca’s trees are about nine to ten years of age, he said.

Econpile all ready for big infra jobs

“It’s a cycle. Transportation infrastructure is the market focus right now. When all these infrastructures are in place, it may again encourage property developments, particularly in areas surrounding the facilities.”

The company is slowly moving away from smaller-scale substructure contracts, having accumulated better capacity and experience to undertake larger-scale ones. It allocates an average RM20 million per year for capital expenditure to size up its fleet of machinery — together with research and development efforts — to improve their processes and equipment, and to provide training for employees.

Econpile has some of the largest and most advanced piling equipment in the country. They are kept in a seven-acre (2.83ha) workshop in Bukit Beruntung, Selangor, and are manned by some 120 mechanics — that’s to a quarter of Econpile’s 500-strong workforce.

“We have constantly improved our fleet size and technical capabilities to take on bigger jobs. This year, we broke the record for the deepest pile works in Malaysia, 110m deep with 3m diameter at a high-rise site in Jalan Ampang. We also own one of the biggest drilling rigs in Asia by capacity, and there are just five [such] units in the world. But with such a size, it means its fleet does better if it concentrates on one location without having to be moved too often, like it will have to be for small contracts. That will save on logistics costs.”

Pelangi mildly affected by new textbook policy

On Oct 5, the education ministry announced that it would be using imported English textbooks in schools from next year onwards as part of the ministry’s move to implement the new Common European Framework of Reference for Languages-aligned curriculum.

“In terms of [the] impact on Pelangi, it would be a loss of opportunity that we would not be able to go into English textbooks, but in terms of open market sales, we are still not so much affected.”

The group’s main revenue driver is its publishing segment in Malaysia, with a 74% contribution, while its printing business contributes 11% and other segments 3%. Publishing revenue from its overseas markets, such as Thailand, Indonesia and Singapore, contribute 12% to the group’s overall revenue.

Rising cost of packaging materials to impact F&B firms

“Rising paper price is a concern to F&B players as this will contribute to a higher cost for packaging. Our channel check with an industry player confirms that as of this year, there were already two rounds of price increases by suppliers of packaging materials of about 2% to 3% increases each time.”

“Despite the rising raw material prices as well as packaging cost, on average product prices only increase marginally about 0.5% y-o-y starting from June this year. From this observation, we conclude that while F&B players need to increase product prices, the rising input costs were mostly absorbed for now as it is necessary to maintain market share in the current environment.”

Malaysia, Australia probe data breaches as millions exposed

As the scale and frequency of major hacking attacks increases, companies and governments have come under intense pressure to shore up their cybersecurity. Only about 2 percent of corporate data is encrypted today, International Business Machines Corp. said in July.

Malaysia, with a population of 32 million, has a mobile penetration rate of 134 percent as of March this year, according to government statistics. Almost 80 percent of the 42.8 million subscriptions as of the first quarter are pre-paid accounts.

Malaysia ranks seventh in number of family-owned businesses, says Credit Suisse

“Our research seems to suggest that investors are not too concerned about the level of ownership but rather how involved the family owners are in the daily running of the business. This seems to be at the core of the success of family-owned companies in our view,” Klerk added.

The report also revealed that the financial performance of family-owned companies is superior to that of non-family-owned businesses. Revenue and Ebitda growth is stronger, Ebitda margins are higher, cash flow returns are better and momentum in gearing is more moderate. The report finds that family-owned companies in Asia Pacific ex-Japan have traded at a premium relative to non-family-owned companies since 2006, recording a 10-year average of 8%.

“Malaysia’s Press Metal is among the top 50 family-owned companies globally with market capitalisation above US$2 billion in terms of average revenue growth since 2014,” said Credit Suisse.

Budget 2018: EPF panelist warns of rising expenditure and shrinking tax revenue

“The allocation for the health ministry this year is about RM27bil and this is going to increase in double digit rates over the next 30 years. We need to pay for that if we want to maintain the healthcare system that we currently have. Being Asian, we think that families will take care of the aged, but the family support system is disappearing, and eventually, this situation will entail support from the government.”

“I think as far as load on government finances is concerned, pension is going to be the number one issue over the coming years. Even if we reform the pension system today, there would be a transition period of about 50 to 60 years. We will still be paying pensions for today’s civil service, 60 years from now.”

Tax officials to knock on more doors

“[In a nutshell,] the application of the tax regime is going to be tougher in order to raise the revenues. I think it will be a rigorous implementation of the existing laws by both the IRB and customs [and] there will be greater scrutiny of taxpayers by both authorities.”

Young Muslims catch a $100 billion travel bug

Millennial Muslims — those aged between 18 and 36 — are projected to spend more than $100 billion annually on traveling by 2025, almost double last year’s figure, according to a report from Mastercard and Muslim travel website HalalTrip. All age groups belonging to the religion are expected to spend around three times that much.

The next popular holiday spots are Japan, Thailand and Australia, non-Muslim countries where tourism is a key engine of economic growth. Some are starting to recognize the opportunities.

The number of Muslim international travelers is expected to grow to 156 million by 2020, partly due to the growth of the religion’s population: it’s expected to reach nearly 3 billion worldwide by 2060, a 70 percent jump from 2015, according to the report. Come 2030, almost a third of the world’s population aged 15-29 is forecast to be Muslims.

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