Company Notes 2018.03.16

UMW to takeover MBM Resources and raise its stake in Perodua

MBM Resources is involved in the distribution and dealership of major international and local vehicle brands in Malaysia such as Perodua, Daihatsu, Hino, Mitsubishi, Volkswagen and Volvo, as well as the manufacturing of automotive parts.

Assuming full acceptance of UMW Holdings’ proposed mandatory offer for MBM Resources, the company’s effective interest in Perodua will increase from 38% to 60.6%. The completion of the deal with PNB Equity Resources will increase its stake in Perodua to 70.6%.

“The proposed acquisitions are consistent with the company’s strategy to enhance its core businesses in the automotive, equipment and manufacturing and engineering segments. It will allow the company to further improve its prospects in the automotive segment via leveraging on Perodua’s strength in the national car segment, coupled with the company’s existing presence in the non-national car segment via the Toyota marque,” it added.


GDEx to grow C2C business

Teong elaborated that plans earmarked for MBE Malaysia will revolve around increasing efficiencies of the company, which include forming a digitised platform, improving accessibilities, and potentially become package drop points for GDEx.

“Following the completion of MBE’s acquisition, which is expected to be by the end of this quarter or early next quarter, we intend to roll out one new MBE outlet per month. As for GDEx, we have targeted to open 20 new branches this year, and are considering to market our products through re-sellers,” said Teong.

The retail delivery services or C2C segment remians a relatively untapped segment in the local logistics industry. For illustration purposes, the C2C segment in Japan, considered a mature market, makes up an estimated 15% of the nation’s logistics market. Currently, the retail delivery operations in GDEx contribute less than 2% of total turnover.


Hartalega focuses on organic growth, adds new plant

“No M&A and no targets have been identified at this moment. We are purely on organic growth and our focus is to grow our business as there are plenty of opportunities in the glove manufacturing distribution.”

“We plan to sell our antimicrobial gloves globally but the first launch will be in Europe in May this year, while we prepare the document for submission to the FDA. The FDA submission is a milestone for us because it gives credibility to our products. Once we get FDA approval and certification, it will be a good testimony for our products.”


Proton taps into Geely’s advanced auto technology

Geely is targeting to ramp up production to a whopping 400,000 cars in 10 years to penetrate the domestic, regional and global markets.

Bumiputera vendors, salespersons as well service centre operators should take cognizance of the intense competition in the global automotive industry. It is imperative that they upgrade to sales, service, spare parts and spray painting (4S) service centres so as to benefit from Geely’s endeavour to create the infrastructure for the supply of competitively-priced auto components.

Malaysian companies should develop strategies now to reap CPTPP benefits, says HSBC

“Perhaps the biggest benefit, the deal will eliminate most tariffs between member countries, and where tariffs are maintained, cuts will be significant. For instance, the tariff on New Zealand beef exports to Japan will fall to 9% from 38.5% today, when the deal enters into force,” Sill said quoting studies.

Collectively, the improvements meant some 500 million people in 11 countries would have access to greater and cheaper choice of goods and services. “Combining over US$10 trillion of economic output — about 13.5% of the world’s GDP — these nations offer bright prospects to the business community too,” he added.

Company Notes 2018.03.02

Techfast Q4 FY2017 Results

All the machines that have been purchased for the military and aerospace projects have been commissioned and are operational. Current work-in-progress are on track and the machines are expected to contribute positively to the sales turnover and hence the bottomline of the SCF business segment for the financial year ending 31 December 2018.

Following on the announcement of the agreement signed with Tecore Synchem, Inc. on 19 December 2017 for the supply and sale of Tecore’s products, the project has now commenced. Samples of Tecore’s products have already been submitted to two of Cape and Oriem’s customers, which are multinational companies, for evaluation and testing.


Thong Guan Industries Q4 FY2017

For the financial year 2018, the group has planned to commission more stretch film production line as well as PVC food wrap lines, two more production lines. With the additional capacity coming on stream in year 2018, the Group is optimistic to continue its upward trend in sales volume and profitability.


IQ Group Q3 FY2018 Results

As explained in the previous quarter’s Commentary on Prospects, we anticipate that similar performance conditions will remain throughout the remainder of this financial year, i.e. with reduced sales due to some delays in new product launches. However, as previously explained, going forward thereafter we anticipate positive performance as various new product launches roll out in FY18/19. Relationships with our global customer base remain very strong and we are blessed with considerable current and future
opportunity from both established and new business relations.

As stated in our prior report, the current volume of product development requirements is good from a new business perspective, but challenging from a resource and timing standpoint. However, following the structural changes within IQ’s R&D resources we are facilitating an acceleration of our new product development capabilities as we go forward.

This FY has proved to be very much a transitional year for IQ, but the future prospects and opportunities are positive from both an ODM and Own Brand perspective and we remain excited about the future.

Bonanza returns for AirAsia co-founders

“The special dividends will always continue because we have many [non-core] assets that can [be] monetised,” said Fernandes, adding that these assets include a 25% stake in online travel agency AAE Travel Pte Ltd, a joint venture with Expedia Southeast Asia Pte Ltd, logistics, cargo and food businesses.

On the back of envelope calculation, the low-cost carrier is getting some RM4.32 billion in cash from all the divestments. Excluding the sum for debt repayment, AirAsia has a sizeable cash pile for dividend payment.

Fernandes and Kamarudin are deemed to have interest in AirAsia through Tune Live and Tune Air Sdn Bhd. Tune Live, equally owned by the duo, holds a 16.73% stake in AirAsia, while Tune Air owns a 15.45% stake. Fernandes controls 48.33% equity interest in Tune Air, while Kamarudin 40.23%, and Abdel Aziz @ Abdul Aziz Abu Bakar holds the remaining 10.94% stake. Tune Live and Tune Air are the largest shareholders of AirAsia.


GDex buys retail postal firm MBE for RM5.5mil

GDex believes that the proposed acquisition is a very strategic move for the group to venture into the retail delivery service sector. MBE Malaysia’s 92 outlets would strengthen GDex’s current network of 79 branches nationwide. MBE Malaysia’s outlets are mainly operating in business districts and shopping malls, which provide great accessibility to business, retail and e-commerce customers.


Fresh growth driver of SKP Resources

With the in-house PCBA capability, SKP Resources is expected to enjoy a wider profit margin and earnings growth will be broadly in line with other EMS players. SKP Resources currently sources PCB parts from other EMS players.

SKP Resources’ in-house PCBA capability could eventually turn into an integrated one-stop EMS service provider and enhance the group’s chances of bagging more contracts from its major customers, commented Kenanga Investment Bank Bhd analyst Desmond Chong in his latest financial result review last Friday.


Notion VTec optimistic about 20% revenue growth

Notion VTec executive chairman Thoo Chow Fah told The Edge Financial Daily that he hopes to see the automotive segment grow by 30% to 40%, and the HDD segment to grow by 5% to 10% this year. Besides that, he said Notion VTec is currently working to secure at least two new clients from Singapore, to provide parts for the contract manufacturers, involving the production of scanners. “We hope to sign the deal with these two potential clients within the next two months,” he said.

In its filing with Bursa Malaysia last Friday, the company said the fall in revenue was mainly attributable to reduction in sale orders following the fire, where HDD, auto and engineered products posted lower sales of 4%, 26% and 14% compared with the preceding quarters respectively. The Oct 20 fire broke out, apparently from a ventilation fan, spreading to the roofing, at its manufacturing plant in Jalan Haji Salleh in Klang. The company said the fire affected more than 552 computer numerical control (CNC) machines and work-in-progress goods, and also the quality control building. Instantly, Notion VTec’s production capacity was down by 40%.

“We have torn down the building, and are currently in the phase of rebuilding a new factory, which should take us to another nine months or so. In the meantime, we have rented four factories nearby as well as utilising all the space we have in our other factories in Johor and Thailand to reach our production level,” Thoo said, adding that the new plant is expected to be fully operational by 2019.


Labour shortage weighs on earnings of HeveaBoard

“During the quarter under review, we had as low as 1,500 workers and this had impacted us as we needed more workers to start our new factory [which was completed in August last year]. This resulted in a backlog of orders to fulfil, which impacted our production efficiencies,” Yoong told The Edge Financial Daily via an email response. Currently, HeveaBoard has about 1,900 workers.

“The management highlighted that the group hedges its 40% sales proceeds to mitigate the risk of forex fluctuations. With the recent sharp rally in the ringgit against the US dollar, that is, from as high as 4.40 in the fourth quarter of 2017 to the current 3.90, the management acknowledged that the negative impacts on the group are unavoidable with the time lag of about two to three months for the group to partially price in the forex factor to customers,” said Lee.

Company Notes 2017.12.08

SCGM Q2 FY2018 Results

The Group foresees the new Kulai factory targeted to be completed in the fourth quarter of current financial year ending 30 April 2018 will contribute positively to its future revenue and net profit following the expansion of its production capacity and installation of new production lines.

Cautious response to Top Glove buy

There is so much upside to the new deal in the making, considering the surgical gloves business offers higher margins due to its product quality, technology and the research and development involved in its production. It is also a market that has high barriers to entry that confront many glove players in a rapidly growing global healthcare industry.

“Our indicative US dollar cost of funding range from 2.5% to 3%, whereas ringgit borrowings cost is at 4.5% to 4.8%, a difference of around 1.5% – which translates to around RM19mil savings per annum,” he says. Therefore, a dollar loan will give us a perfect natural hedge, in the event of currency fluctuations. Ringgit borrowings, may result in mismatch due to the inflow of sales proceeds in dollars,” he elaborates.

“New expansions that has kicked off in the last few years will start generating cash and this will improve our cash flow in FY18. This will be more than sufficient to meet our organic expansion capex of around RM200mil to RM250mil.”


Kelington set to be lifted by gases

The contract, which involves on-site supply of nitrogen gas to a photovoltaic cell manufacturer in Malaysia, will provide a long-term revenue of about RM20mil over a period of ten years.

“We started our operations seventeen years ago to provide ultra high purity (UHP) gas delivery solutions to the electronics and semiconductor industry, which is still our mainstay business. Given our long-built experience and expertise in the field, it is relevant for us to penetrate the industrial gas segment in order to provide an end-to-end service. The venture into the industrial gas segment is a step in the right direction as it is synergistic with our existing core business. In fact, our clients consist of electronic manufacturers who utilise gases in their manufacturing processes.”

Kelington plans to invest up to RM60mil to build a carbon dioxide gas purification plant, which is anticipated to contribute revenue from FY19. “The new venture complements our existing project-based business model of providing engineering services which are usually completed within six to 12 months. In the coming years, demand for liquid carbon dioxide is expected to grow further on the back of rising demand in the food and beverages industry as well as the upcoming roll-out of large infrastructure and construction projects.”


More build-to-suit projects to come — Axis REIT

With limited “Grade A” assets in the market, allowing REITs to embark on build-to-suit projects will enable Axis REIT to create their own “Grade A” assets, said Leong, adding that the promoters of the REIT were previously “builders of industrial assets”. As REITs are only allowed to develop up to 15% of their portfolio, Leong said Axis REIT cannot proceed with redeveloping Phase 2 of the Axis PDI Centre as Phase 1 already takes up about 10% of their assets under management (AUM). Currently, the Phase 2 of Axis PDI Centre is still generating income as a storage yard for cars.

Over 12 years, the REIT’s portfolio has grown from five properties to 39 properties comprising 7.6 million sq ft and 132 tenants, with a total AUM of RM2.25 billion in size. “The yields for our property are pretty good. Overall our portfolio [yield] is almost 9% [per annum],” said Leong. The REIT is targeting to reach RM3 billion in AUM next year, and is looking at yield-accretive acquisitions. With the conclusion of a private placement two weeks ago that raised RM178.75 million, Leong said the exercise will enable Axis REIT to reduce their gearing to 29% from their current 36%. “[With] that, we will be able to allow more breathing space to provide a war chest for Axis REIT for growth next year,” said Leong.


Pensonic now at a crossroads, says CEO

“We have to allocate resources for future businesses to seek transformation in the next five to 10 years. Being in the home appliances segment, we missed out on the mobile phone and personal computer wave in the 1990s till 2000s. We want to make sure we don’t miss out on this digital age, particularly the IoT and wearables segment, which is why we have a consortium with some industry players to come up with a product or concept for the future.”

Pensonic has put together a team to focus on the e-commerce platform and is spending about RM500,000 for the infrastructure, Nelson said. Moving forward, its 700 retailers nationwide will also double up as pickup centres for customers, he said. On smart products, he said some 10 categories of appliances have been identified for value adding, where the group will incorporate the aspect of IoT into the products, which will take into account the evolving needs of customers.


Ajinomoto eyes 50% sales growth in two years

“Ajinomoto Thailand, Vietnam and Indonesia are already experienced in diversification, so Malaysia can leverage from their know-how when pursuing this,” Yamamoto said at a briefing on the group’s first half results yesterday.

This year’s performance, Yamamoto said, will be driven by strong sales from its consumer to business segment, supported by product diversification efforts and pricing strategy. But she cautioned that rising production cost could limit its near-term profit growth.

Saudi Arabia is a major export market for Ajinomoto, followed by the United-Arab Emirates and Oman, among other markets in the Middle-East.


GDex expects mid-teen growth in FY18 revenue, says MD

However, stiff competition and the group’s ambition to expand “aggressively” both domestically and regionally over the next few years are likely to add further pressure to the courier service provider’s margins, he said.

This will include allocating between RM30 million and RM50 million per annum for capital expenditure (capex) over the next two years to double its handling capacity, which currently stands at 120,000 parcels a day.

Outside Malaysia, the group only has a presence in Indonesia via its subscription to PT Satria Antaran Prima’s convertible bonds, which it has until 2021 to exercise. Although Teong foresees the local courier industry consolidating in the near future, he said GDex will focus on organic growth in Malaysia instead of considering further acquisitions.


Astro to invest RM100m in JV

“The JV will extend Astro’s online presence among the Malay-language audience, propel its combined monthly unique visitors to approximately 10 million, and is in line with its goal to build Nusantara and Islamic content verticals. In pursuit of our journey of reinvention, Astro is embracing change brought about by digital and mobile while staying true to our core as a consumer-first company. Regionally, we will forge complementary win-win partnerships, as well as identify strategic and opportunistic investments for our growth portfolio, as well as giving us a seat at the table to learn from value creators and disrupters of the future.”


Gamuda says construction supply chain ‘overstretched’

Local contractors may face cost pressures from a tightening supply chain in the years to come as mega infrastructure projects begin rolling out.

Though Gamuda has been touted as one of the biggest potential beneficiaries of the East Coast Rail Link (ECRL) project, Lin observed that “foreign funding usually comes with foreign participation”. “In an ironic sense, foreign participation can actually help ease the pressure on the [local] supply chain. But [these projects] will miss out on the benefits of localisation,” he said, adding that the government will have to weigh these factors in making any decision.


Acoustech exits audio business

“The disposal of the unprofitable audio segment will allow the group to focus on and utilise its resources solely for its core segment — property development. The divestment will eliminate any further erosion of the group’s profits that may result from the audio segment’s poor performance.”

“The proposed acquisition will allow the group to consolidate its supply channel and improve efficiency, resulting in longer-term cost savings and to ensure continuous supply of speaker units. By consolidating the supply chain, our group is expected to maintain better quality management and expand the future range of products that it can market to its customers. Currently, the board does not expect additional financial commitment to maintain FPT’s business. [However,] the management expects that further investments in FPT will help generate returns in the longer run through cost savings and faster turnaround for production requests. Therefore, Formosa Prosonic’s management expects FPT’s prospects to be favourable in the longer term based on the anticipated improvement in global demand for consumer electronic products.”

Move over tech. Here come Southeast Asia’s builders

With at least $323 billion in infrastructure spending in the pipeline in Southeast Asia and potentially more expected over the next few years, 2018 could well shape up as the year of builders’ stocks from Indonesia to the Philippines that have been the laggards in a broader market rally this year.

“Infrastructure has been under invested whether it’s clear water, clean air, energy, roads, ports, railways, education, health care — so there are tons of opportunities.”

Malaysia has allocated 210 billion ringgit ($51.6 billion) for projects in the 2018 budget of which 73 percent will go rail and public transport. About 55 billion ringgit allocated to East Coast Rail Link, 50 billion-60 billion ringgit given to Kuala Lumpur-Singapore High Speed Rail and 40 billion ringgit to phase 3 of the mass rapid transit system. Rail, affordable housing, roads and water infrastructure are major segments that will benefit from government’s spending next year, Sharizan Rosely, an analyst at CIMB wrote in a report dated Oct. 30. General election due by August 2018. Biggest construction companies: Gamuda Bhd., IJM Corp. Bhd., Sunway Construction Group Bhd., Malaysian Resources Corp. Bhd.


Klang Valley retail occupancy rate at 5-year low

“As of 3Q17 (third quarter of 2017), total retail stock in [the] Klang Valley stood at 61 million sq ft and estimated pipeline supply for those under construction is currently estimated at 16 million sq ft, comprising 23 projects. This implies an overall growth of 26% to current stock. In recent years, we have witnessed a mall closure in Petaling Jaya, and increasing occupancy stress, low footfall and retailers’ turnover, in some of the newer [and older] malls, matched by slower or worse, no rental growth and [an] increasing need to provide for tenants’ incentives.”

“Some of the newer malls have been struggling to establish market share that is getting more fragmentary and diminishing. “Construction of [the] mass rapid transit network has spurred a wave of transit-oriented developments, and more retail space supply can be expected along the train ride, resulting in overlapping catchments and intensified competition. It is and will continue to be very much impacted by the ongoing structural changes in the market, and not a normal supply-demand disequilibrium, that in the past could be resolved through the passage of time, rising affluence and population.”


Gas price hike to raise steel makers’ costs by RM200m a year

The average natural gas base tariff will be revised upwards by RM3.85 per MMBtu or 14.23% from RM26.46 per MMBtu to RM30.90 MMBtu for the non-power sector, including steel producers, in Peninsular Malaysia from Jan 1 to June 30, 2018. In addition to this, under the new gas cost pass-through (GCPT) mechanism, a surcharge of RM1.62 per MMBtu will apply to all tariff categories due to the higher liquefied natural gas price against the reference price in the base tariff during this period. This translates to an average effective tariff of RM32.52 per MMBtu across all categories, at an average increase of RM6.06 per MMBtu or 22.90%.


A lift for small developers

Smaller property developers will no longer need to just rely on bank financing to ease their cash flows. They can monetise upfront from the cash flows of their billings via a bond issue which potentially takes away businesses from banks.

“This will disrupt property financing in Malaysia, especially for bankers depending on businesses from small developers. Typically, developers need to wait for the three-year construction period before they are able to collect their portion of the development cash flows. For the smaller developers, liquidity is a huge issue.”


Ensure Chinese investments offer locals high-skilled jobs too

But to Wan Saiful, while MCKIP promises high-value investments and to grow the Malaysian economy, the immediate jobs created there have been mostly low-skilled construction jobs. Further, he thinks future jobs will likely be factory-based and that it is uncertain how locals can be transitioned into higher-level jobs once investors leave.

Likewise, he said tens of thousands of jobs have been created for locals in Africa via Chinese investments. “However, these have mostly been low-skilled,” he added. Citing a 2014 academic survey, he said among the 400 companies that invested in 40 African countries 80% to 97% were low-skilled roles which were occupied by locals.

Company Notes 2017.11.24

APM Automotive Q3 FY2017 Results

APM believes that innovation is one of the keys to success and has not allowed the current challenging economic climate to be a deterrent in its pursuit of the same. In this respect, APM has invested in and established a fully functional research and development centre that houses more than 80 engineers. This centre is equipped with some of the latest cutting edge technologies and a central testing laboratory. APM’s engineers have been carefully selected and are capable of handling a range of tasks, including product design and development as well as manufacturing process and technology improvement.

Having the credentials that include over 30 years of manufacturing experience have enabled APM to remain competitive over the years but APM is aware that it cannot rest on its laurels and rely on past successes to drive it forward. APM aims to further improve on its competitiveness and market share through the gradual introduction of automation into its manufacturing processes, the continued adoption of forward transactions based on actual commitments rather than leveraging on derivatives and speculative hedging to curb losses associated with currency fluctuation and the increased focus on the export market for its products.


GD Express Carrier Q1 FY2018 Results

The decline in performance for the current quarter under review was mainly due to higher operating expenses incurred for expansion of network and infrastructure to cater for the higher demand of express delivery by e-commerce business.


Star Media Group Q3 FY2017 Results

On 12 July 2017, the Company announced the completion on the disposal of Cityneon Holdings Limited by Laviani Pte Ltd, a wholly-owned subsidiary company. Accordingly, Cityneon Holdings Limited and its subsidiaries have ceased to be the indirect subsidiary companies of the Company.

With the sale of the two radio stations (Capital FM and Red FM) which were loss making in the last financial year, Radio segment is expected to contribute positively to the Group.

Star is actively searching for new investment opportunities especially in the digital sector to further complement and enhance its existing assets. The fast evolving media landscape into all things digital and the ever changing consumer preferences make it a priority for Star to maintain its engagement with its audiences via the latest technologies.


Daibochi Plastic and Packaging Industry Q3 FY2017 Results

The Group has marked good progress in its Myanmar plant. Daibochi Myanmar achieved, in a short period, the ISO 9001:2015 and Hazard Analysis and Critical Control Point food safety management system (HACCP FSMS) certifications in October 2017. With these certifications, Daibochi Myanmar is now equipped and ready to supply flexible packaging to global food and beverage (F&B) and fast moving consumer goods (FMCG) brands.

At the same time, Daibochi Myanmar is extending its existing business footprint by pursuing new contracts from the FMCG sector in Myanmar. The positive feedback from the sales team after three months of visiting customers in Myanmar, coupled with Daibochi Myanmar’s technical capabilities and product quality, makes the Group confident of entering the qualification process for various companies and new product lines of existing customers in the fourth quarter of 2017.


Boon Koon Group Q2 FY2018 Results

The Group expects the automotive market to remain challenging due to stiffening competition for the rebuilt commercial vehicles as a result of the influx of more China commercial vehicles. However, the company will continue looking for option available to undertake new dealership for commercial vehicle and to progressively expand the number of distributors and marketing arms around Malaysia, particularly in Johor and Kuala Lumpur. The demand for the rebuilt and brand new commercial vehicles is continuously growing in these states in view of various ongoing and new mega infrastructure construction projects which are currently being implemented.


Supermax Q1 FY2018 Results

The Group is making good progress in developing its contact lens business. Not only has it successfully set up its production operations over the last few years, but it is also seeing its intensive efforts to procure the necessary certifications and approvals to produce and bring its products to market bear fruit.

The certifications and approvals obtained to date include the US FDA 510K, the CE Mark and the Brazilian Anvisa license for the overseas markets; and the Medical Device Authority license for the Malaysian market. It is currently pursuing the approvals required to gain access to the Japanese market, the 2nd largest contact lens market after the USA. The Group will continue launching its products in the various overseas markets after obtaining the necessary approvals.


Heineken Malaysia Q3 FY2017 Results

Group revenue in the quarter also received a boost in the cider category following the successful launch of HEINEKEN Malaysia’s new mainstream cider brand Apple Fox in August 2017 and the commencement of sale of locally brewed Strongbow Apple Ciders.


FoundPac Group Q1 FY2018 Results

Demand for our stiffeners and accessories for stiffeners are expected to remain steady. For medium to long term, we will put more effort and concentrate on the products of test socket, hand lids and accessories for test sockets to gain more market segment.


Rhone Ma Holdings Q3 FY2017 Results

The Group’s future plans and strategies will focus on the expansion of our manufacturing activities by constructing and operating a new GMP-compliant plant in Nilai, Negeri Sembilan Darul Khusus which will increase our production capacity by approximately four (4) times of the existing maximum production capacity. As at to-date, we have obtained the planning approval and are awaiting approval for the commencement of earthworks from the relevant authority. The construction of the plant is estimated to be completed by the fourth quarter of 2018.

We have commenced work on our new warehouse situated in Kapar, Selangor Darul Ehsan in July 2017. The new warehouse, which will be used as our main distribution centre to cater to our increasing storage needs for both animal health products and food ingredients, is estimated to be completed by the third quarter of 2018.


Techfast Holdings Q3 FY2017 Results

Preparations for the military and aerospace project are still underway as the machines are still being commissioned. The broaching machine and materials for this project from the USA are expected to arrive in December 2017.

Cape is currently working with one of the biggest semi-conductor companies in China, which is assessing the standard and the quality of our products. Sales to Taiwan had seen some volume increase in this current quarter. The management team expects that the standard and quality of our products would be accepted in a matter of time, as already evidenced by some increase in sales volume to Taiwan thus far

Oriem is working on a high end LED and epoxy projects with two reputable international original equipment manufacturers (“OEM”) in Penang. Oriem is already an approved vendor which meets the standards and requirements of their supply chain. The evaluation of our company’s new products is still in progress.


Serba Dinamik Holdings Q3 FY2017 Results

Recent announcement for the establishment of a chlor-alkali plant in Tanzania would mark as our first step into Africa and the Company expect to further grow the business in the region. It also re-affirms our plan to grow our asset ownership business model which would lead to further enhance our EPCC & O&M capabilities.


Tune Protect Group Q3 FY2017 Results

The innovative initiatives put in place are gaining traction in favour of the global Travel reinsurance business, notably in product bundling with our key airline partner. In its early stages of implementation, dynamic pricing and other targeted marketing initiatives also aim to elevate sales and overall customer experience. Continued collaboration with our airline partners and new personalized travel products in the pipeline, including Family, Migrant and Annual travel plans, is expected to further strengthen our recovery.


Focus Lumber Q3 FY2017 Results

The logs supply issue has been temporarily resolved since early August but the costing of our products had increased significantly due to the higher logs price paid in order to secure logs supply. Although the selling price of plywood has been an increasing trend recently, we expect that it will not help much on our profit margin recovery due to the current cost structure of our inventory as well as the higher logs price. Other than local suppliers, we are also looking to purchase veneer sheets from overseas when there is a shortage in logs supply in future.


Dagangan NeXchange Q3 FY2017 Results

The Group’s Information Technology business continues to firm up its e-services by broadening its product range in business-to-business segment to complement the Group’s position in delivering business-to-government services. The new recurring income from operation and maintenance of the VEP&RC System, eWork Permits, and the 1Trade, a Web-based one-stop portal for total cargo and trade management and related services have further open up a new revenue stream to the Group.


Telekom Malaysia Q3 FY2017 Results

Our main broadband service offering continues to grow with unifi reaching 2.70 million households nationwide to date, and our mobile offering achieving 8.0% mobile penetration.

In supporting the Government’s initiative, we successfully completed Sistem Kabel Rakyat 1Malaysia (SKR1M). SKR1M is the result of a successful Public-Private Partnership (PPP) collaboration between TM and the Government through Malaysian Communications and Multimedia Commission (MCMC) which has achieved the project completion as scheduled and is now commercially launched. The new submarine cable system spans over 3,800 km lands at six (6) landings in Kuantan, Mersing, Kuching, Bintulu, Miri and Kota Kinabalu.


N2N Connect Q3 FY2017 Results

Following the successful acquisition of AFE, the enhanced coverage in Malaysia, Singapore, Indonesia, Philippines, the United States, Hong Kong, Macau, and Vietnam has positioned N2N to become one of the largest Asian-based platform providers. As Merger and Acquisition is one of the key expansion strategies, N2N is continuously seeking several other suitable acquisitions that are synergistic to its business.

These prospects include information service terminal, trading platform, data center hosting, network infrastructure and the acceptance of our latest back office settlement system by several brokers in Malaysia, Thailand and Philippines.


Petron Malaysia Refining & Marketing Q3 FY2017 Results

With all sectors posting positive growth, total sales volume reached 9.0 million barrels, a 15% improvement from 7.8 million barrels last year.

Dated Brent averaged US$52 per barrel during the quarter compared to US$46 per barrel in the same period in 2016. Brent crude reached US$56/bbl in September this year, up by almost US$10/bbl or 20% from the June level compared to the range-bound movement during the same period in 2016. As oil prices rose, the price differentials between finished products and crude also widened which further improved the Company’s margin.

The Company continues to pursue its network upgrade and expansion program amidst the more challenging market and business environment.


Lii Hen Industries Q3 FY2017 Results

The cost increases in raw materials, labour and subcontractors charges continue to affect the Group’s gross profit margin by 2% compared to the immediate preceding quarter.

The fire outbreak occurred on 27 October 2017 at one of the finishing plants have the operational impact on the bedroom sets, however the effect was mitigated by working extra shift/hours at main premises. The production was resumed on 14 November 2017.


Salutica Q1 FY2018 Results

Leveraging on the Group’s experience and expertise in Bluetooth technology and R&D capabilities, we had begun developing Bluetooth-enabled personal healthcare related products under our in-house brand FOBO. Currently, we are at the proof of concept stage base on engineering prototypes.

The Group is continuing with the manufacturing of a USB-powered device that adds touchscreen functionality to a non-touch laptop screen. The touch enabling functionality may be incorporated into applications for various industry segments, such as automotive and electronic appliances, subject to expected gestation period for product certification or homologation.

FOBO Tag, the World’s 1st patented Bluetooth 5 tracker was launched on 31 August 2017 on a crowd funding platform. The Group will start shipping FOBO Tag product in early December 2017.


Chin Well Holdings Q1 FY2018 Results

In order to cushion the stress from the safeguard duty which imposed by the Malaysian government towards the end of the financial year ended 30 June 2017 on the wire rod imported from China, the Group had sourced its raw material from other alternative countries such as the Middle East and Vietnam which are duty exempted and without compromising the quality of our products. Application to the authorities for the exemption of the duty is in the progress with the hope to obtain the approval in the next few months.

The Group expects its DIY segment will continue to contribute positively to the Group’s performance through the increase of its distribution network in the European and US markets. While for the Wire division, with the expansion in the production of new product lines such as welded fencing, gabion and poultry mesh, it is expected to further enhance the division’s result in this financial year with its high value added margin.


Heveaboard Q3 FY2017 Results

The decrease in revenue for the reporting quarter was due to the planned annual preventive maintenance at the particleboard sector and also the shortage of foreign workers at the RTA sector which had resulted in higher operational costs as optimum production capacity could not be achieved.


PPB Group Q3 FY2017 Results

Although the flour markets in Malaysia, Indonesia and Vietnam remain competitive, Grains and agribusiness segment is expected to perform satisfactorily. Performance of the Consumer products segment is expected to remain stable. The business of Film exhibition and distribution segment will continue to be driven by the newly-opened cinemas in Malaysia and Vietnam; and the movie title releases for the rest of the year. Environmental engineering and utility segment will continue to focus on timely completion of its on-going projects and participate in tendering for prospective projects. The launching of the mixed development project in Taman Megah, Petaling Jaya in November 2017 is expected to contribute positively in the coming financial year.


Kossan Rubber Industries Q3 FY2017 Results

The demand for gloves remains robust, with the Group’s production plants running at full capacity. The Group’s latest Plant 16 located along Jalan Meru, was initially expected to be completed in July 2017. However, there was a slight delay due to machine installation and water supply issues. Two of the eight production lines were completed in October which are now under production-trial, with the rest six lines going to be completed by Dec. We expect contributions from this plant for this year to be minimal, with full contributions to start from Jan 2018 onwards. Plant 16 which has an installed capacity of 3 billion pieces per annum, will focus on the Group’s patented Low Derma Technology gloves. This latest state-of-the-art plant incorporates many of the latest technologies, including highspeed dipping technology with a high-degree of automation to reduce the dependence on manpower. Construction works for Plant 17 and 18, also along Jalan Meru have commenced and expected to be completed by 2018. These 2 new plants would be capable of producing up to 4.5 billion pieces (1.5 and 3.0 billion pieces respectively) of nitrile
gloves per annum once completed.

Research & development remains one of the cornerstones of Kossan’s success. The construction of the Group’s integrated Research and Development cum Training Centre (“RDTC”) is completed in the 4th quarter of 2017. The RDTC will house the Group’s world class research, lab and testing facilities for new innovations and quality improvements. It will also serve as the nerve centre for research into engineering and robotic implementations as well as automation systems for existing and new manufacturing plants.


Thong Guan Industries Q3 FY2017 Results

For the third quarter ended 30 September 2017, the Group has continued its double digit growth trend in its sales. The group commissioned its second nano layer stretch film line and its 8th PVC food wrap line during the current quarter. With the additional capacity coming on stream in the final quarter of 2017, the Group is optimistic to continue its upward trend in sales volume and profitability.


Karex Q1 FY2018 Results

Result from operating activities was lower due to pressure on tender prices and rising production costs coupled with higher distribution and administrative expenses. Distribution and administrative expenses pertaining to efforts to build Own Brands through advertisement, hiring of human capital and expansion of our distribution network continued to impact profitability.

Distribution expenses had increased due to higher freight costs for shipments to Africa and Asia as well as the marketing cost for the launch of the MyOne range of condoms in US via an ecommerce platform.


Chemical Company of Malaysia Q3 FY2017 Results

The growth in profit before tax is primarily due to higher sales and margin as a result of higher average selling prices of its chlor-alkali products, higher volume sold during the period under review and positive impact on operational efficiency initiatives.


Malaysia Airports Holdings Q3 FY2017 Results

MAHB’s network of airports (including Istanbul SGIA) recorded 95.3 million passengers in YTD September 2017, representing a growth of 8.7% over YTD September 2016. International traffic improved by 13.3% while domestic passengers traffic increased by 4.9%. Correspondingly, aircraft movements improved by 3.1% with international and domestic aircraft movements increasing by 6.8% and 1.0% respectively


Eng Kah Q3 FY2017 Results

Going forward, the Group will further strengthen its presence in overseas markets and joint venture business. Atika Beauty Manufacturing Sdn. Bhd. (“Atika”) has completed its factory renovation and relevant machinery has been installed. The manufacturing operations if Atika has commenced in the third quarter of 2017. The Group’s research and development team has also developed a new range of unique and impressive souvenir products that are able to capture the beautiful scenery and memorable moments of customers’ choice with 3D printing effect on the glass bottle.


BCM Alliance Q3 FY2017 Results

The Group has successfully obtained an appointment from KLS Martin SE Asia Sdn Bhd as the non-exclusive distributor on 10 February 2017 to distribute OT lights and accessories, pendants and modular OR. This create the new brand for medical devices during the financial period ended 30 June 2017 and the new appointment is valid until 5th December 2021 which had been approved by MDA.


Chin Hin Group Q3 FY2017 Results

Lately, we have set up another new subsidiary, Metex Modular Sdn Bhd to venture broadly into Industrialised Modular Building System (IMBS). Application of IMBS in the commercial and industrial construction is not only fast and environmental friendly, this method of construction is scoring the highest IBS points, achieving higher assessment rating over the other IBS method. With appropriate design and construction practice, modular building can ever be a prefabricated prefinished volumetric construction solution system (PPVC System) for big scaled residential and commercial estate within 6 to 12 months period. Chin Hin will capitalise on its internal resources i.e. ready-mixed concrete, wall panel, wire mesh and C-Purlin to maximise its return on the modular business and target to be recognised as one of the most reliable IMBS manufacturer in the market.

Maybank initiates rent-to-own scheme

“The scheme will provide the transparency that customers need and certainty of their monthly rental commitments throughout the chosen tenure. It will also give them the opportunity to earn capital appreciation on their property via the cash-out option,” he added, noting that that “best of all, there is the option to buy the property at a later stage but at a predetermined price.”

To be eligible for the scheme, Maybank said applicants must have a household income of at least RM5,000 per month and committed to a minimum rental tenure of five years. Customers will be subjected to a flat rental payment for the first five years, and they will also be able to purchase the property at a locked-in rate, continue rental tenure with 2% annual rental step-up or terminate the agreement with no further obligations.

“In Malaysia, only 24% of households rent. The society has to correct this social stigma that renting is not the last resort, it is simply a choice.”


Chin Well plans regional expansion

“We have enquiries from customers for more of our new fasteners that are made in Vietnam. We will add more production lines in Vietnam to cater to the rising demand. We aim to have at least a DIY customer in each European country by 2019. We are targeting for the DIY segment to generate about 25% of the group’s revenue in 2019, compared to 15% now.”

“There is now a shortage of graphite, an essential ingredient used for stabilising the temperature in the furnace used for producing steel-based products. This is on top of the problem in China, where the government is closing down all the cottage industries using archaic technology to produce steel in a nationwide effort to curb pollution. We are well stocked on cold-rolled coils which were obtained on competitive prices due to the large amount we order. We have adjusted the pricing of our fasteners accordingly to the hike in raw material prices.”


Jaycorp expects great potential in Sabah’s construction sector

“We are looking at the potential of acquiring additional furniture factories with good management already in place. Our policy for investment is that the partner we look for must be well-known in the industry and the management must know its job. Come the right one, we will say yes.”

Currently, all of Jaycorp’s furniture products are catered for exports, transacted in US dollars. The Chinese market accounts for 40% of the group’s furniture division’s top line, followed by the US at just below 30%, with the remaining made up of several countries including Australia and European nations.

Jaycorp’s factories are running at an average utilisation rate of 80%. The group has three plants for its core business — furniture production, two for wood processing, one for carton box packaging, and one for renewable energy. The rubberwood furniture maker has no stress from cost or shortage of raw materials such as rubberwood — as it has an option to source supply from its subsidiary operating in Medan, Indonesia, which does pressure treatment and kiln-drying of rubberwood.


Tencent mulls e-payment launch in Malaysia next year

Tencent has made a “breakthrough” in gaining an e-payment license in Malaysia for local transactions, and plans a launch early next year, senior vice president S.Y. Lau said in an interview. “Malaysia is actually quite large in the sense that we have 20 million WeChat users, huge potential, and the market is quite warm towards internet products from China,” Lau said.


Top palm oil growers go on defensive against EU curb threat

Indonesia and Malaysia are the world’s top palm oil producers, accounting for 85 percent of supply. The European Parliament’s non-binding resolution urged the bloc’s executive arm to step up efforts to prevent deforestation as a result of palm oil production. The expansion of plantations in the two countries has seen farmers accused of illegally using slash-and-burn methods to clear land, destroying rainforests and habitats for animals, and causing a severe haze that can blanket parts of Asia. Indonesia has said it is ready to retaliate against further attempts to curb palm oil exports.

The European Union is Malaysia’s biggest export destination, accounting for about 13 percent of shipments of palm oil and palm-based products last year, according to the Malaysian Palm Oil Board. About 90 percent of Malaysia’s biodiesel exports also go to Europe, Mah said.


Malaysian palm oil prices seen dropping further on India import duty

India lifted the import tax on crude palm oil to 30 percent from 15 percent, and increased import tax duty on refined palm oil imports to 40 percent from 25 percent. Indian oilseed crushers had been struggling to compete with cheaper imports from Indonesia, Malaysia, Brazil and Argentina, reducing demand for local rapeseed and soybeans which have been trading below government-set prices in the physical market and angering farmers.

Property imbalance growing wider

Bank Negara says the bulk or 83% of the total unsold units were in the above RM250,000 price category. The central bank revealed that 61% of total unsold units were high-rise properties, out of which 89% were priced above RM250,000. Johor has the largest share of unsold residential units (27% of total unsold properties in Malaysia), followed by Selangor (21%), Kuala Lumpur (14%) and Penang (8%). Over the period 2016 to the first quarter of 2017, only 21% of new launches were for houses priced below RM250,000. This is insufficient to match the income affordability profile of about 35% of households in Malaysia. Secondly, the mismatch was exacerbated by the slower increase in median household incomes (compounded annual growth rate (CAGR) 2012 to 2016: 9.6%) relative to median house prices (15.6%).

Since the first quarter of 2015, the office vacancy rate in the Klang Valley has increased steadily from 20.9% to 23.6% in the first quarter of 2017. This is higher than the national average of 18.1%, and more than three times the regional average of 6.6%. The office vacancy rate is projected to reach an all-time high of 32% by 2021, far surpassing levels recorded during the Asian Financial Crisis. In other words, if current supply-demand dynamics persist, one-in-three offices in Klang Valley could be vacant in 2021.

In 2016, Penang had the highest retail space per capita in the country (10.5 sq ft per person), followed by Klang Valley (8.2 sq ft) and Johor (5.1 sq ft). In higher-income regional cities such as Hong Kong and Singapore, prime retail space per capita is only 3.6 sq ft and 1.5 sq ft respectively. The incoming supply of 140 new shopping complexes by 2021 across the Klang Valley, Penang and Johor is expected to worsen the oversupply going forward. While Penang currently has the highest prime retail space per capita, it will be overtaken by Johor by 2018. The large incoming supply of 15.8 million sq ft of retail space in Johor will be 1.5 times the existing supply.


Developers are responsible for the market overhang, says PEPS

In a statement today, the association blames the developers’ indiscriminate building of properties, a lack of market studies and financial feasibility studies being carried out prior to building and no coordination on planning among local authorities and indiscriminate approvals for the market overhang. Other causes include the delay in gazetting of local plans that leads to uncontrolled development and higher cost as well as artificial demand created by members of the public for fear of losing out on choice properties.

“The property industry has linkages to more than 120 industries and collectively account for 10% of gross domestic product. Therefore, any severe property market imbalances and overbuilding will affect the stability of the financial system,” said PEPS, adding that it concurs with Bank Negara Malaysia’s view that “severe property market imbalances can pose risk to macro economics and financial stability”.


Digital economy to contribute 5% to 10% more to GST revenue — Deloitte

“I anticipate that Malaysia will come on board in the next one year or two years. With the digital economy, companies can basically be based everywhere and anywhere, and the customs can move everywhere. We want to tax where the consumption occurs, where the customers are, because that’s where they’re receiving the service.”

“What I and many investors hope to see is a comprehensive tax incentive framework to attract the foreign investors and local SMEs (small and medium enterprises) to come in and make use of the platform to sell their products abroad. Especially for the SMEs, the government needs to offer some incentives in the form of funding made available for them to develop their e-commerce platform infrastructure so they can play a meaningful role in this space and be competitive.”


Online publishers sign MoU to form Malaysian Premium Publishers Marketplace

The current trend of programmatic digital advertising used by marketers is designed to automate how and where ads are placed online, promising wide reach and return on investments. However, this is done at the risk of advertisers losing control of where their ads are placed. In some cases, this has lead to the placement of ads in undesirable, irrelevant or even fake websites. MPPM therefore gathers some of Malaysia’s top media companies to effectively deal with the common digital advertising challenges such as ad fraud and brand misplacement and to provide an extensive solution to further expand brands’ reach to the local market. MPPM member publishers will also be able to improve their revenue, while offering advertisers quality inventory at a reasonable price.

Household savings growth ‘not promising’

Household savings accounted for a meagre 0.9% or RM6 billion of the overall household income, which stood at RM638.8 billion in 2014.

Pioneered by the World Bank since the early 1960s, the SAM is a comprehensive economic snapshot attempting to model the income distribution flow for households, and spending pattern for institutions.