Curated Insights 2018.04.22

Disneyflix is coming. And Netflix should be scared.

But in film, as in television, Disney relies on middlemen to deliver its content—and middlemen always take a cut. To buy a ticket to see a Disney film in theaters, you pay an exhibitor that keeps about 40 percent of the ticket price. What if Disney bypassed the middlemen and put a highly anticipated film like Black Panther on its streaming service the same day it opened in theaters—or made the film exclusive to subscribers? In the short term, sacrificing all those onetime ticket buyers might seem financially ruinous. But the lifetime value of subscriptions—which renew automatically until actively canceled—quickly becomes profound. If the film’s debut encouraged just over 4 million people to sign up for an annual subscription to a $10-a-month Disneyflix product—about the same number of subscribers that Netflix added the quarter it debuted its original series House of Cards—Disney would earn a net revenue of nearly $500 million in just the first year. Black Panther was a massive hit as a theatrical release; it could have been even bigger had it been used to transform onetime moviegoers into multiyear Disneyflix subscribers.

The math might make this seem like an easy call for Disney, but let’s not underplay how radical this move would be, and how seismic the effects on the existing entertainment industry. In recent years, the theatrical-release business has been carried by blockbusters—and Disney has been perhaps the most reliable producer of those. From 2010 to 2017, films earning more than $100 million have grown from 48 percent to 64 percent of the domestic box office, according to the research firm MoffettNathanson—and Disney has made the year’s top-grossing film in six of the past seven years. If Disney moves its films, en masse, to a proprietary streaming platform, it would smash movie theaters’ precious window of exclusivity and leach away crucial revenue. Exhibitors such as AMC and Regal may find themselves on an accelerated path to bankruptcy or desperate consolidation.

In this vision, Disneyflix wouldn’t just be Netflix with Star Wars movies—it would be Amazon for Star Wars pillowcases and Groupon for rides on Star Wars roller coasters and Kayak for the Star Wars suite at Disney hotels. That’s a product that could rival Netflix and create the kind of profits Disney has enjoyed during its unprecedented century of dominance. The company just has to destroy its own businesses—and the U.S. entertainment landscape—to build it.

Zillow, aggregation, and integration

To quickly summarize, I wrote that Aggregators as a whole share three characteristics:

  • A direct relationship with users
  • Zero marginal costs to serve those users
  • Demand-driven multi-sided networks that result in decreasing acquisition costs

This allows Aggregators to leverage an initial user experience advantage with a relatively small number of users into power over some number of suppliers, which come onto the platform on the Aggregator’s terms, enhancing the user experience and attracting more users, setting off a virtuous cycle of an ever-increasing user base leading to ever-increasing power over suppliers.

Not all Aggregators are the same, though; they vary based on the cost of supply:

  • Level 1 Aggregators have to acquire their supply and win by leveraging their user base into superior buying power (i.e. Netflix).
  • Level 2 Aggregators do not own their supply but incur significant marginal costs in scaling supply (i.e. Airbnb or Uber).
  • Level 3 Aggregators have zero supply costs (i.e. App Stores or social networks)

Remember, Zillow is in nearly every respect already an Aggregator: it is by far the number one place people go when they want to look for a new house, and at a minimum the starting point for research when they want to sell one. They own the customer relationship! What has always been missing is the integration with the purchase itself — until last week. Zillow is making a play to be a true Aggregator — one that transforms its industry by integrating the customer relationship with the most important transaction in its respective value chain — by becoming directly involved in the buying and selling of houses.

Here, though, Zillow’s status as an almost-Aggregator looms large: we now have years’ worth of evidence that realtors will do what it takes to ensure their listings appear on Zillow, because Zillow controls end users. It very well may be the case that realtors will find themselves with no choice but to continue giving Zillow the money the company needs to disrupt their industry.


Facebook to put 1.5 billion users out of reach of new EU privacy law

If a new European law restricting what companies can do with people’s online data went into effect tomorrow, almost 1.9 billion Facebook Inc users around the world would be protected by it. The online social network is making changes that ensure the number will be much smaller.

The change affects more than 70 percent of Facebook’s 2 billion-plus members. As of December, Facebook had 239 million users in the United States and Canada, 370 million in Europe and 1.52 billion users elsewhere.

In practice, the change means the 1.5 billion affected users will not be able to file complaints with Ireland’s Data Protection Commissioner or in Irish courts. Instead they will be governed by more lenient U.S. privacy laws, said Michael Veale, a technology policy researcher at University College London. Facebook will have more leeway in how it handles data about those users, Veale said. Certain types of data such as browsing history, for instance, are considered personal data under EU law but are not as protected in the United States, he said.


Why all my books are now free (aka a lesson in Amazon money laundering)

One reader forwarded this article on Amazon Money Laundering written by Brian Krebs. He argues that serious money laundering is going on with stolen credit cards: “Reames said he suspects someone has been buying the book using stolen credit and/or debit cards, and pocketing the 60 percent that Amazon gives to authors. At $555 a pop, it would only take approximately 70 sales over three months to rack up the earnings that Amazon said he made.”

My guess is eventually you’ll see the government step in, fine the crap out of Amazon, which will then be followed by a multi-billion dollar class-action lawsuit.

The iPhone X generated 5X more profit than the combined profit of 600+ Android OEMs during Q4 2017

The iPhone X alone generated 21% of total industry revenue and 35% of total industry profits during the quarter and its share is likely to grow as it advances further into its life cycle. Additionally, the longer shelf life of all iPhones ensured that Apple still has eight out of top ten smartphones, including its three-year-old models, generating the most profits compared to current competing smartphones from other OEMs.

Apple remained the most profitable brand, capturing 86% of the total handset market profits. Further splitting profits by model, the top 10 models captured 90% of the total handset profits.

Car dealerships face conundrum: Get big or get out

Dealers say they need to as much as triple revenue in the next half-decade to offset shrinking margins and increasing competition from companies that didn’t exist a decade ago…These developments have helped fuel consolidation of the 16,800 U.S. dealerships into the hands of fewer owners. The top 50 dealer groups are poised to book more than $175 billion in revenue this year, compared to $144 billion when Mr. Buffett’s Berkshire Hathaway Inc. entered the sector four years ago.

Your future home might be powered by car batteries

By allowing car batteries to serve as a residential power source, Nissan says its vehicle-to-home service cuts utility bills by about $40 per month. Still, only about 7,000 car owners have adopted the system in the six years since it started, a tiny number compared with the 81,500 Leaf EVs that Nissan has sold so far in the country.

A small test this winter showed how hard it is just to get people to charge their cars at the right time. (Selling power back to the grid is a separate can of worms.) Nissan and the utility convinced 45 of their own employees to install home chargers and try monitoring electricity demand on weekends, using a smartphone app. Even though volunteers got free shopping points on Amazon as a reward for buying power when there was glut, only about 10 percent succeeded.

It’s a slow beginning, but Nuvve Chief Executive Officer Gregory Poilasne says vehicle-to-grid systems could eventually speed up the adoption of electric vehicles once people realize their batteries can earn them money. Poilasne says his clients make more than $1,000 per car each year by trading power to the spot market.


Blockchain is about to revolutionize the shipping industry

Should they succeed, documentation that takes days will eventually be done in minutes, much of it without the need for human input. The cost of moving goods across continents could drop dramatically, adding fresh impetus to relocate manufacturing or source materials and goods from overseas.

“This would be the biggest innovation in the industry since the containerization. It basically brings more transparency and efficiency. The container shipping lines are coming out of their shells and playing catch-up in technology.”

In 2014, Maersk followed a refrigerated container filled with roses and avocados from Kenya to the Netherlands. The company found that almost 30 people and organizations were involved in processing the box on its journey to Europe. The shipment took about 34 days to get from the farm to the retailers, including 10 days waiting for documents to be processed. One of the critical documents went missing, only to be found later amid a pile of paper.

Chinese money floods U.S. biotech as Beijing chases new cures

Venture-capital funds based in China poured $1.4 billion into private U.S. biotechnology firms in the three months ending March 31, accounting for about 40 percent of the $3.7 billion that the companies raised in the period overall, according to data provider PitchBook. At the same time a year earlier, Chinese funds invested $125.5 million, only about seven percent of the total.

China once lagged other countries in drug spending despite its large population, but outlays have expanded over the past decade. In 2012, China surpassed Japan to become the second-largest global drug market behind the U.S., according to a report from health-technology firm Iqvia, formerly known as QuintilesIMS. It could spend as much as $170 billion by 2021, compared to $116.7 billion in 2016, the firm said.

Selling drugs in China is also getting easier. Western companies usually waited for approval elsewhere before starting clinical trials in China because of the country’s cumbersome rules. But those restrictions have been relaxed, leading U.S. companies to view China as a more important market, and making Chinese investors hungry for to share in the returns from new therapies.

Technique to beam HD video with 99 percent less power could sharpen the eyes of smart homes

Backscatter is a way of sending a signal that requires very little power, because what’s actually transmitting the power is not the device that’s transmitting the data. A signal is sent out from one source, say a router or phone, and another antenna essentially reflects that signal, but modifies it. By having it blink on and off you could indicate 1s and 0s, for instance.

Assembly and rendering of the video is accomplished on the receiving end, for example on a phone or monitor, where power is more plentiful. In the end, a full-color HD signal at 60FPS can be sent with less than a watt of power, and a more modest but still very useful signal — say, 720p at 10FPS — can be sent for under 80 microwatts. That’s a huge reduction in power draw, mainly achieved by eliminating the entire analog to digital converter and on-chip compression. At those levels, you can essentially pull all the power you need straight out of the air.

Casualties of your own success

I valeted at a hotel in college. We parked 10,000 cars a month. And we banged one of them up every month, like clockwork. Management found this atrocious. Every few weeks we’d be scolded for our recklessness. But one accident in 10,000 parks is actually pretty good. If you drive twice a day, it’ll take you 14 years to park 10,000 times. One bent fender every 14 years is a driving record your insurance company won’t bat an eye at. The only reason we seemed reckless is because we parked so many cars. Size (or volume) put a negative spotlight on us that being less busy with the same parking skills would have masked. Big companies deal with this too. Chipotle sells half a billion burritos a year. You, at home, washing everything in bleach, could never make one carnitas burrito a day for half a billion days (1.4 million years) and expect to avoid a foodborne illness.

One is that everything moves in cycles. You can’t extrapolate the benefits of growth because growth comes attached with downsides that go from annoying at one size to catastrophic at another. Rising valuations that come with investment growth is the clearest example, but it’s everywhere: Headcount, media attention, AUM, and influence have downsides that can eventually grow faster than their benefits. Remembering that volatility is attracted to outlier growth puts many things about business and investing in context.

The second is size is associated with success, success is associated with hubris, and hubris is the beginning of the end of success. Some of the most enduring animals aren’t apex predators, but they’re very good at evasion, camouflage, and armour. They’re paranoid. I always come back to the time Charlie Rose asked Michael Moritz how Sequoia Capital has thrived for three decades, and he said, “We’ve always been afraid of going out of business.” Paranoia in the face of success is extremely hard but in hindsight it’s the closest thing to a secret weapon that exists.

Debt recycling

By investing a total of $55,097.13 I was able to purchase 3 properties over a 5 year period, with a combined value of just over $1,000,000. Two years later I sold one of the properties, using the proceeds to reduce the leverage of the remaining portfolio. I was able to recover my $55,000 of cash contributions, and still be left with equity worth over $473,000. At that point I could have sold a second property and used to proceeds to fully pay off the mortgage on the remaining property. This could have provided me with rent/mortgage free accommodation for the rest of my life, or alternatively contributed $26,000 in annual free cash flow towards covering my own lifestyle costs.


Why ‘sleep on it’ is the most useful advice for learning — and also the most neglected

Walker relates problem solving to the REM phase of sleep, demonstrating that it is in this critical stage of unconsciousness that we form novel connections between individual chunks of knowledge. REM sleep is where our ideas crystallise and recombine into new, creative thoughts.

The premise of adaptive timetabling does not fit will with a standardised model that runs on a fixed clock. Sleep does not lend itself to the measurement paradigms of today’s education system. Education is mired in empiricist dogma, hell-bent on measuring whatever it can, and then assigning importance only to what has been measured. It should be evident that the nature of problem solving, so much of which is rooted in unconscious thought, is holistic and beyond the blunt tools of written assessment. Any timed exam that seeks to capture students’ problem solving skills within a fixed period is, by the findings of neuroscience, a contradiction in terms.

Regional Notes 2018.04.20

China replaces U.S. as top export market in another Asian nation

“The center of trade for Asia has clearly shifted to China from the U.S.,” said Eugenia Victorino, an economist at Australia & New Zealand Banking Group in Singapore. “Trade protectionism isn’t helping and Asian nations will realize more and more that when it comes to trade, China now punches a heavier weight.”

China has displaced the U.S. over the past decade as the top export market for many Asian economies, including Japan, South Korea, Thailand, Indonesia, and the Philippines. India is one of the few countries in the region that still counts America as a bigger market for goods than China.

Vietnam’s exports to China surged about 15 times to $50.6 billion in the decade through 2017, compared with a fourfold increase to the U.S. to $46.5 billion, according to import data compiled by the IMF. With exports accounting for almost 100 percent of gross domestic product in 2017, being overly reliant on one market can pose risks for the economy. To counter that, Vietnam is pursuing free trade deals with Japan and other countries in Europe and has also joined 10 other nations in March in signing a Trans Pacific trade pact.

India may become surprise victim of trade war, Rabobank says

A tariff war will reduce exports and lead to imported inflation, which will hurt Indian purchasing power and investments, according to the Rabobank study. That could mean as much as 2.3 percent of missed GDP growth for India by 2022. This goes against the argument that India is relatively insulated from a trade war, given its low share of total world exports of just 1.7 percent.

Besides a possible trade war, a faster-than-expected tightening of U.S. monetary policy will lead to capital outflows. Rabobank’s models estimate India losing $22 billion in capital flows by 2022, with the scenario getting complicated further, in case political instability hits India. The South Asian nation heads into a national election early next year.

Singapore releases public consultation on Airbnb-style home-sharing

Condominium owners who want to rent out their property for short-term stays can do so if owners holding on to at least 80 per cent of the development’s share value agree to allow such rentals, the Urban Redevelopment Authority (URA) has proposed. In a statement, URA said the framework will look at how short-term stays can be applied to developments with common property, such as condominiums, fire safety requirements, the role of management committees and how to regulate the platform operators, among other things.


Cost of living not the problem, low income is — MIER

“Our labour market pays very little in nominal income, it is very slow-paced and the skill level of our labour market is not improving. This aggregate number [of 3.3%], it hides a lot of unpleasant things in the labour market; low pay, low productivity, low skill, and the high number of foreign workers.”

Malaysia’s labour productivity stands at US$54,400 (RM211,616) compared with Singapore’s US$125,400, according to the MIER. According to the Department of Statistics, Malaysia achieved labour productivity value of RM85,031 in the fourth quarter of 2017.

Zakariah pointed out that the minimum wage policy represents a significantly lower proportion of the median wage, so that means there is a lot of room for an increase in minimum wage. However, he also acknowledged that many small and medium enterprises could not afford to pay the living wage of RM2,700 prescribed by Bank Negara Malaysia.

PUC to invest RM90mil in 11Street

Assuming that PUC reached its investment target, it would end up with as much as 24% stake in 11Street Malaysia, with ADS holding 37% and SKP at 39%. The investment amount translates to an implied valuation of 100% equity interest in CPSB ranging from RM333.33mil to RM375mil. Post signing of the definitive agreements, PUC will have the right to nominate and appoint the chief executive officer and chief marketing officer at 11Street Malaysia.

From 2015 to 2017, 11Street Malaysia reported an achievement of more than 300% growth in gross merchandising value (GMV), 160% growth to over 13 million product listings, and 200% increase to 40,000 sellers registered on its platform. As of Dec 31, 2017 11Street Malaysia recorded a GMV of approximately RM427mil and total monthly unique visitors (UV) of 13.5 million for the month of December 2017.


JAKS Resources puts property ambition on hold

The group has no plans to acquire more land for development amid a soft property market that is favourable for big-scale developers. “When the market picks up and if the opportunity arises, we may re-enter the property market. For now, we will stay away from property development.”

In the next two years, JAKS sees the US$1.87 billion 2x600mw coal-fired thermal power plant in Hai Duong Province, Vietnam, driving the group’s profit growth. “Construction of the power plant is currently 22% complete and is targeted to reach 50% by the end of the year. There is a strong indication that work on the project will be expedited for full completion in 2020. As such, 2018 and 2019 are crucial years for us,” Lam Poah said.

In Malaysia, JAKS is eyeing to participate in public infrastructure projects involving road works, bridges, hospitals and sewerage treatment plants. “We are focused in terms of going into areas where we are strong and the chances of us winning the projects are high. We look at smaller, pocket projects such as water pipe replacement or sewerage plant instead of going after mega projects where we can’t compete with the big boys,” said Si Eeng.


Signature MD baffled by group’s stock slump

“If it’s overreaction to the slow property market, this one is a very long-winded overreaction. They compare our business to other fast-moving consumer products, where they expect the revenue or profit to be steady and consistent. Our business depends on projects and their timing. No doubt we’re down now [with the slow property market]; that’s our challenge and we have to look at how to mitigate that and improve our retail business. Also, last time our projects order book grew because we couldn’t recognise [revenue] yet as the project sites not ready, as new ones came in. That gave the impression we’re flourishing. But when projects kick off as we recognise revenue, the order book will be reduced. But that doesn’t mean we have no prospects. We still have our retail. Should I be worried about getting new projects? I think the developers should worry first. If they don’t launch, they have nothing to sell. So if they continue to have business, so will we.”

Started in 2015, the cash vouchers scheme has secured letters of award (LoAs) for about RM50 million worth of kitchen cabinetry from some 30 projects — of which about 90% are yet to be realised. Revenue realisation is slow because it will depend on completion of project, sale, and handover of units to home buyers. “It’s the opposite of our project business — where the awards are slow but realisation [of revenue] can be fast,” Tan said.


Chin Well to make Vietnam focal point for fastener ops

“In July, the Vietnam facility will start to manufacture a new range of fasteners for South-East Asian market. These new fasteners will be used to connect reinforced concrete bars used in high-rise buildings.”

“We have plans to tap into the European market with our DIY fasteners. Currently, the Vietnam facility produces about 60,000 tonnes of fasteners per year. We foresee the operations in Vietnam to contribute about 50% to Chin Well revenue in two years, compared to 30%-40% now.”

Penang residential overhang more than doubles in 2017

The residential overhang in Penang more than doubled to 3,916 units worth RM3.82 billion in 2017 from 1,896 units worth RM1.47 billion in 2016. Similarly, the unsold [units] under construction recorded a 13.9% increase with 9,249 units (2016: 8,119 units).

The primary market recorded fewer new launches with 3,879 units in 2017, down by 31.3% against 5,646 units in 2016. Sales performance for the new launches last year – of which condominiums and apartments accounted for 65% – was promising at 39%. As at end-2017, there were 497,396 existing residential units with another 44,046 units of incoming supply and 24,597 units in planned supply.


‘Repopulating’ George Town via co-working, co-living spaces

“We want to repopulate George Town, so we want to have co-living spaces on the first floor of these shophouses, while the ground floor is used for commercial activities, preferably traditional trades and artisans,” newly appointed MBPP mayor Yew Tung Seang told the news portal.

The report also revealed that MBPP has worked with George Town World Heritage Inc (GTWHI) and Think City to restore a row of council-owned shophouses on the famous Kimberley Street, as the pilot project for co-living and commercial spaces for artisans.

“Rental will be kept affordable so that people will want to come back to live in George Town,” Yew told the news portal. It is hoped that such efforts will make the inner city of George Town “a liveable space for all”.

Regional Notes 2018.04.06

Singapore issues first fines to Airbnb hosts for violating rental laws

In a first for the country, two men were fined SG$60,000 (US$45,800) each for unauthorized lettings at four apartments using the U.S.-based rental platform, Reuters reports. Singapore’s law prevents public housing rentals that are under six months — or three months in the case of private housing — without the explicit permission of the Urban Redevelopment Authority (URA).

Poly Glass Fibre looks overseas to offset weak local demand

“Demand in Southeast Asia is there, just that the price may be lower. But the recent anti-pollution drive in China is something advantageous to us because supply from China dropped and we see prices coming up again.”

In Southeast Asia, Fong said there are only three manufacturers of glass mineral wool insulation and Poly Glass Fibre is the only one in Malaysia. “The other two are based in Thailand and they mainly serve their home market, which is big enough. One of them even focuses specifically on the automotive segment,” he said.

“We are currently using about 65% of our capacity. Ideally we hope to reach 90%, but it would take two to three years to build up orders for our new line. So in the next one or two years, we don’t think we will do much in terms of expansion.”


LSK eyes another 30%-40% earnings growth in FY18

Securing a US-based customer represents LSK’s entry into the North American market, even as it continues to expect growth from its key customers in Asia. In particular, the group has continued to see strong growth in sales in South Korea, a market in which it enjoys a dominant position due to the group’s reputation for offering high-quality products, said Kong Sim.

Another area the bedding manufacturer has set its sights on is the e-commerce space. According to Kong Sim, the group has seen encouraging response for its products on Chinese online marketplace Taobao and it is planning to explore e-commerce opportunities on a much bigger scale. “This is part of our plan to go direct to our customers and cut out the middle man,” he said, adding that LSK has been in talks with Alibaba and its peers, and is currently on a learning curve.

Furniture exports hit RM10.13bil last year

The United States is the largest importer of Malaysian furniture in 2017 valued at RM3.59bil, followed by Singapore (RM790.1mil), Japan (RM785.6mil), Australia (RM710.5mil) and the United Kingdom (RM476.1mil).

Regional Notes 2018.03.30

China’s push for tech self-sufficiency threatens Asia’s exporters

But at the same time, there’s been a spike in sales to China of precision metal working machines and equipment for making chips from firms like Japan’s Yaskawa Electric Corp. With a Chinese state-backed fund gearing up to pour as much as $31.5 billion into homegrown semiconductor manufacturing, there’s potential for trade flows to start to shift.

Yet the direction is clear: Beijing is aiming higher and it has the resources to reach its destination. And that will mean difficulties for many companies around the region. “China, in a very short period of time, is rapidly going up the value chain,” said Gary Hufbauer, senior fellow and trade specialist at the Peterson Institute for International Economics in Washington, speaking from Taos, New Mexico. “They will produce the things that Korea and Japan are now producing, and Korean and Japanese firms have a big challenge to try to keep ahead on the technology.”


Uber pulls out of Southeast Asia, selling operation to rival Grab

The cease-fire marks a victory for Grab as well as SoftBank Group Corp., the biggest shareholder in both companies. Masayoshi Son’s firm is pushing to reduce competition in a Southeast Asian ride-hailing market forecast to reach $20.1 billion by 2025. Uber and Grab, together with two other SoftBank-backed ride-hailing firms — India’s Ola and China’s Didi Chuxing — provide about 45 million rides a day, according to SoftBank presentation material in February.


Regulators to ensure Grab-Uber deal will not erode competition

“We will ensure that no one single market player dominates the sector to the detriment of commuters and drivers,” an LTA spokesman said. The LTA added that it was reviewing a regulatory framework to license private-hire car operators “to keep the private-hire car and taxi industries open and contestable”.

The CCS said Singapore’s competition laws prohibit mergers that may result in a “substantial lessening of competition”, and indicated that it could “require the merger to be unwound or modified” to prevent an erosion of competition. It said it could also issue “interim measures” before it made up its mind.

The taxi company agreed in December to pay some $640 million for a 51 per cent stake in Uber’s Singapore rental car fleet. ComfortDelGro spokesman Tammy Tan said: “We are reviewing all aspects of the proposed tie-up with Uber Technologies, which is currently under review by the CCS.”

Pentamaster plans dividend in two years

“Currently, 50% of our exports go to mainland China, including to US-based multinational corporations located there. We expect the exports to rise to 60% in the near future. The business opportunity is great which is why we are expanding our facilities.”

“I think KWAP is seeing the potential in the future of technology we are in — 3D sensing. It is going to be used a lot in autonomous cars and electric vehicles. We have developed a 3D sensor testing capability to test the component that can be used in telco, automotive and smartphones.”

He said five years ago, PCB only focused on automotive handlers without test solutions, which “anyone could do”, so he built the handler with tester as a complete ecosystem to reduce competition.

“We are also looking to secure more IARM business from the US. We have secured a few now. This segment has a lot of growth potential because of Industry 4.0 where factories look to becoming fully automised. Our technical sales unit in Sunnyvale, US, would be able to discuss with clients regarding requests for quotations and proposals. Proximity to our clients is key, hence we see our US business growing. More so now with the US placing 30% tariff on raw materials which would make manufacturing in US expensive.”


US tariffs may hurt Malaysian technology firms

However, a report last Friday by Nomura highlighted US trade protectionism and a sharper-than-expected slowdown in China as bigger risks to the Malaysian economy, as exports account for 71% of GDP. “We estimated Malaysia’s ultimate exposure to the US — including via intermediate goods to China for assembly into final products destined for the US — at 10% of GDP, about half of which is in electronics products,” the research house said, adding that another 8% is exposed to China’s final demand.


Minimal impact on M’sia from US tariffs

This is because Malaysia’s trade exposure to both China and the US accounted for 25% of its total trade, she said, pointing out that Malaysia was impacted by Washington’s earlier move to impose tariffs on solar panels.

Malaysia is the largest exporter of solar cells and panels to the US, accounting for 24% of total US imports of the products last year. Meanwhile, the country’s steel and aluminium exports to the US of US$300 million in 2016 accounted for only 1.8% of total exports to the US.

In 2017, China was Malaysia’s second-largest export destination, constituting 13.5% or RM126.2 billion of total exports, while the US was the third-largest export destination, accounting for 9.5% or RM88 billion of Malaysia’s total exports.

Bank Negara cautions of severe property market imbalances

“Such (the purchase of non-residential properties) financing accounted for 26.1% of banks’ exposures to the property market or 13.5% of banks’ total outstanding loans. End-financing for the purchase of shops accounted for the bulk (40%) of banks’ exposures to non-residential properties or 5.4% of banks’ total outstanding loans. Exposures (via end-financing) to the office space and shopping complex segments, where oversupply is particularly acute, accounted for 3.2% of banks’ total outstanding loans,” it said.

Based on Bank Negara’s analysis, the incoming supply of 38 million square feet of new office space in Klang Valley is expected to drive vacancy rates to an all-time high of 32% by 2021 (1997: 5.1%; historical high in 2001: 25.3%), far surpassing levels recorded during the Asian Financial Crisis (AFC).

The incoming supply of 140 new shopping complexes by 2021 across Klang Valley, Penang and Johor is expected to worsen the oversupply condition in this segment. In 2016, major states such as Penang, Klang Valley and Johor already had higher retail space per capita (10.5, 8.2 and 5.1 square feet per person, respectively) relative to regional cities such as Hong Kong and Singapore (3.6 and 1.5 square feet per person, respectively). This will continue to exert downward pressure on occupancy rates and rentals.


Malaysians’ income weighed down by low-wage foreign workers

“In Malaysia, our salaries and wages are low, as half of the working Malaysians earn less than RM1,700 per month and the average starting salary of a diploma graduate is only about RM350 above the minimum wage. The low-income segment of Malaysian households face many challenges with regard to their income level. Since 2014, the bottom 40% (B40) population’s income expanded by 5.8% on an annual basis. However, expenditure grew at a faster pace of 6%, reflecting the rising cost of living. It is high time to reform our labour market by creating high-quality, good-paying jobs for Malaysians,” he said at a media briefing after the release of the central bank’s 2017 annual report here yesterday.

From 2011 to 2017, the share of low-skilled jobs in Malaysia increased significantly to 16% compared with only 8% in the period of 2002 to 2010. Apart from that, local economic sectors that rely on foreign workers such as agriculture, construction and manufacturing also suffer from low productivity.

Company Notes 2017.11.17

United Plantations Q3 FY2017 Results

In the U.S., the soy bean harvest is in full swing and weather has been favorable, hence, the U.S. soy bean production is expected to be historically high due to the increased planted acreage in combination with good yields. In South America, the soy bean plantings are delayed in Argentina due to excessive moisture and in the northern part of Brazil due to dry conditions, however, at time of writing it’s still too early to ignore an expected South American bumper crop. The increase in soy bean production is therefore expected to have a negative impact on prices during 2018 as global vegetable oil stocks are expected to recover from current levels


Hovid Q1 FY2018 Results

Preceding quarter’s revenue was affected by lower sales and products being out-of-stock as they were depleted during the period when the manufacturing licences were revoked, and production not being able to run optimally due to insufficient workers during the initial months subsequent to the reissuance of the manufacturing licences. In comparison, production for all plants are operating at 24 hours a day during the current quarter to deliver the back-orders received during the period the licences were revoked.


Ranhill Holdings Q3 FY2017 Results

As for the International Environment sector, our strong partnership with SIIC has resulted in reducing the project loans’ interest with an average interest saving of approximately 1%. The joint venture is now poised to commence exploring new opportunities for industrial waste water concession contracts and other potential water related works in China and other South East Asia countries under the One Belt One Road initiative. 


Scicom MSC Q1 FY2018 Results

The BPO division has taken the following actions to mitigate the impact from clients’ change in strategy: a. Cost mitigation – The BPO division is mitigating its cost structure on two major fronts, namely controlling operations cost and enhancing utilization of the Group’s fixed asset base. For the current financial quarter under review as an indicator, direct contribution increased slightly to 30.5% as compared to 29.3% for the preceding financial year ended 30 June 2017; b. Extensive build up in sales pipeline Leveraging on Scicom’s track record and experience in multilingual contact centre management, Scicom’s business development team has been actively participating in new tenders with estimated contract value of approximately RM105 million. The management further expects to substantially successfully convert outstanding tenders from the above pipeline to commence operations and contribute to the Group’s bottom line by the fourth quarter of the current FY.


Apex Healthcare Q3 FY2017 Results

Steady revenue growth was achieved across all business units, with increased contributions from pharmaceutical sales to the Government sector and contract manufacturing services

During the quarter, the Group’s pharmaceutical manufacturing operations secured certification for compliance with European Union Good Manufacturing Practice, opening future growth opportunities.


Paramount Corporation Q3 FY2017 Results

…following the completion of the Sale and Leaseback agreement with Alpha REIT to dispose of the Sri KDU campus under its asset-light strategy which generated a gain on disposal of RM77.8 million. With the completion of the Sale and Leaseback agreement with Alpha REIT, as part of its asset-light strategy,
the Group would continue to explore opportunities to enter into similar ventures in future.

With the enlarged K-12 segment, comprising Sri KDU and REAL Education which offer premium and more affordably priced alternative private and international schools respectively, Paramount Education is now able to reach a wider segment of the K-12 market. Sri KDU’s mark of excellence in quality education continues to prevail in the market. Following the success of PISA in 2012, Sri KDU International School achieved the International School Quality Mark (ISQM) Gold Award this year, the first in Malaysia and third in Asia to procure this award.


Eastern & Oriental Q2 FY2018 Results

In the past months we are beginning to see more enquiries and bookings for our existing projects in STP1 namely Andaman and Tamarind. Besides selling down our inventory to improve our cash position and net gearing levels, we are heartened by the numerous unsolicited interest in our non-core assets which we have identified for disposal.


Lay Hong Q2 FY2018 Results

The entry of NH Foods Ltd into the Company as a substantial shareholder recently has marked a major step forward for the Company’s chicken product manufacturing business in the form of new product development and market penetration.

The Company is on track with its planned expansion to increase our production capacity. Our egg production now stands at approximately 2.3 million eggs per day to date and is expected to grow to our target. At the same time, our broiler capacity will increase to cater to new requirements in our food processing taking into consideration our JV with NH Foods Ltd.

The Company is constantly reviewing its strategies and will capitalize on the strength of NH Foods to take the Company to greater heights. A new joint venture company under the name of NHF Manufacturing (Malaysia) Sdn Bhd has been set-up and is now actively working on its plant set-up and product development. As at to-date, a total of 11 products have been launched and the response has been encouraging. The Company is continuously researching on viability of new products to be developed and introduced to our production line. It is expected that new products will be launched in future.

A piece of industrial land in Selangor Halal Hub, Pulau Indah has been identified for the plant to be set up and is currently working on the factory and machinery layout. This is expected to be the site for the JV with NH Foods. Works to acquire and build the said factory is progressing in a timely manner in accordance to our planned timeline.


Evergreen Fibreboard Q3 FY2017 Results

The increase in revenue was mainly contributed by commercial run of new Particle Board Plant in Segamat and higher average selling price as the Group emphasis more on high premium products as well as impact from weakening of Malaysian Ringgit against US Dollar.

The slight decrease in profit was mainly caused by higher log and glue cost, couple with higher repairing and upgrading cost incurred on the stoppage line in Thailand plant.


Ge-Shen Corporation Q3 FY2017 Results

The Group is still looking towards factory expansion across the subsidiaries to increase factory space and manufacturing assets in order to, amongst others achieve higher sales, improving cost structure and gain economies of scale. The construction and renovation of the new facilities in Vietnam is in progress despite some delays and expected to complete by beginning of 2018. Total capital expenditure is expected to increase due to higher building specifications and factory facilities investment and is expected to improve the cost structure and increase production capacities in the Vietnam subsidiary in the long
run.


Vitrox Corporation Q3 FY2017 Results

…contributed from the increase in revenue recorded for Automated Board Inspection (ABI) and Machine Vision System (MVS). The increase was mainly due to higher demand from widen customer base and positive acceptance of our products.


Aemulus Holdings Q4 FY2017 Results

Aemulus continues to create growth through innovation and leadership in the ATE markets for semiconductor devices. The launching of our new RF tester, Amoeba 7600-S combines our latest technology with scalability. We believe that the technology is going to be able to serve the smartphone and tablet market well especially in the Far East region. Based on the current business trend, demand for ATE from the smartphone and tablet segments as well as the enterprise storage segment is expected to continue into 2018. The group is expecting revenue growth to further accelerate in the fiscal year 2018, led by ATE sales growth in the Far East region with US region complementing it.


Pentamaster Corporation Q3 FY2017 Results

The higher revenue recorded was mainly due to increase in sales from automated equipment and smart control solution system segment which was partially offset by the decrease in sales from automated manufacturing solution segment.


IFCA MSC Q3 FY2017 Results

To further accelerate innovation and growth within the property sector, IFCA has initiated an accelerator program with a primary focus to create greater value and solutions for the property sector together with the start-up community. In this program which is specifically focused on prop-tech, IFCA will review potential prop-tech start-ups for opportunities for investment and partnership to bring new solutions and business models into the market.


Century Logistics Holdings Q3 FY2017 Results

Following the ongoing synergy process, the Group also intends to tap on the extensive network and infrastructure of its major shareholder, CJ Logistics Group. The Group is currently setting up the necessary infrastructure to roll-out its parcel delivery operation and expects to commence the operation by the first quarter of year 2018.


Kejuruteraan Asastera Q3 FY2017 Results

To (i) grow its market share in Malaysia by increasing tendering activities, focusing on affordable housing sector and geographical expansion; (ii) strengthen its capabilities by growing its mechanical engineering services segment; and (iii) diversifying its revenue stream by providing maintenance services including upgrading, expansion, refurbishment, retrofitting and renovation projects.

Hartalega to launch ‘game-changer’ gloves next year

“Bacteria coming into contact with the glove surface will be exposed to the anti-microbial activity which, in independent testing, has achieved up to a five-log (99.99%) kill within five minutes of contact. We have successfully conducted production trials and further clinical studies are planned to quantitate the benefits of using antimicrobial medical examination gloves in clinical settings.”


Spritzer eyes export markets, to place out stake to Singapore fund

“We think that growth domestically has become a bit saturated now. So, it is a good move to explore overseas markets. The partnership with Dymon Asia Private Equity will take us to new markets and expand the business even further. They can help us with the export markets and bring the brand to overseas markets especially in the countries that they are already in. To start from scratch will be an uphill challenge and this partnership is a good way to do it. Dape would like to give its industry experience and broad networks to support Spritzer.”

Spritzer will build a single-storey automated warehouse adjacent to its current bottling plant with a built up area of about 105,820 sq ft. “The new warehouse will have an automated storage and retrieval system. The existing warehouse is operated manually and almost fully utilised now. The current warehouse will not be able to cater to our needs should inventory levels rise,” said Chuah.


MAHB dismisses competition fears in Istanbul

Some analysts believe that MAHB’s wholly-owned Istanbul Sabiha Gokcen International Airport (ISG) has benefited from the current Ataturk Airport’s space constraints as the latter is surrounded by urban areas, constraining cost-effective expansion. As such, the upcoming new airport may draw passenger traffic from ISG once it begins operations.

“We believe that both the new airport and ISG have two different markets to serve, especially considering that ISG is ideally located on the Asian side of Istanbul,” MAHB told The Edge Financial Daily. “It is strategically positioned not only as the airport serving the Asian side of Istanbul, but also as a de facto city airport, serving the whole of Istanbul. “Aside from that, ISG’s resilience compared to Istanbul Ataturk Airport during the geopolitical tensions in 2016 proved that travellers had a strong preference for our airport,” the airport group added.

It may also help MAHB reduce its exposure to lingering risks in Turkey while returning to its original intention of being a partner of ISG instead of fully owning it.


Scicom to expand digital space presence

“If you talk to anybody who has a proposition, it’s going to be an online proposition. We have all the infrastructure [for that], from building the application to doing the mobile apps to the payment gateways. So there is a huge market there [as] the future will be all e-commerce and because we have this unique set of skills where we understand customer relationship management, customer fulfilment, technical support, payment gateways, mobile apps, [and] application development — this makes all the difference. We can’t just be a call centre anymore, it doesn’t pay.”

“The strategy is to make e-government solutions a major contributor down the line, primarily as the margins are better, contract terms are longer and typically every year business increases as the population increases, so you would always have natural growth.”

“The trick is to get one new big business every year; that’s how you maintain your growth momentum. I wouldn’t necessarily agree there would be an impact; I think we have lots and lots of business in the pipeline; it’s just a matter of time to conversion.”


Mikro MSC to tap IoT to keep earnings growth momentum

“When we talk about new products, it is related to existing offerings. It’s more like an upgrade with new features, maybe with some elements of IoT. Rather than a stand-alone system, it will be an integrated system … everybody wants to have all these features but the pricing must be at a level that is right for businesses and our customers.”

Presently, the group commands about 50% of the local market share and has seen its business in Vietnam gain traction. Yim said Asean’s and Malaysia’s infrastructure growth stories are positive for Mikro MSC since its digital meters, relays and power factor regulators are used in high rises, as well as in mass rail transport systems being developed in the region.

In FY18, the group expects to complete its move to its new factory in Shah Alam — which it bought for RM11.7 million. The move is expected to cost it another RM5 million, including for the purchase of new equipment and machinery. “It gives us the opportunity to introduce new automation and other capacity that we could not do in the past as we have a larger space now,” Yim added.

Property market will be badly hit in 2018, says expert

Cheong pointed out that the RM12.26 billion is only from the primary market, which includes launches by developers. It does not include the secondary market, which is house owners seeking to sell their homes.

Cheong said this “generous payment mode” exists because developers are finding it hard to sell off their new properties. He said they are in danger of losing their bridging finance from banks if they fail to sell at least 40% of the total units. The bridging finance is used by developers to support their construction.

“This is where the danger starts. I predict if this continues, markets will crash within 24 to 30 months because consumers do not have the financial capacity to buy properties any more. Furthermore, developers who started building two years ago are expected to flood the market further with their units…So about RM16 billion of properties are waiting for buyers. But there is no demand. The reason is that people don’t have the money.”


Industrial property set to gain

The rapid growth of e-commerce, especially in Asia-Pacific, is creating new high-value assets that are now coming on stream. The industrial segment is a highly under-invested sector, as stock availability remained tight while rental rates had been on the rise over the past two years (over 30%).

The e-commerce boom will be a looming threat to retail malls, while the rapidly-growing office supply will continue to put rents under pressure. To tackle the challenges faced by the retail REITs, malls are shifting towards providing more lifestyle and food and beverage offerings, as opposed to just brick and mortar.


Will AIA, Great Eastern, Prudential list on Bursa?

There are 23 general insurers and 14 life insurers in Malaysia. Market share is more evenly distributed in the general insurance segment in terms of 2016 annualised gross earned premium, with local players comprising 52.1% and foreign players accounting for 47.9%. However, foreign names dominate the life insurance sector, with total market share of 81.7% in 2016 vs. the 18.3% of local insurers. AIA, Great Eastern and Prudential have a combined market share of 66.7% (in terms of gross earned premium).

Company Notes 2017.07.28

Public Bank in a filing with Bursa Malaysia (and press release)

“The focus on the financing for the purchase of residential properties, passenger vehicles and lending to small and medium enterprises, has remained a market niche for the Group as it has maintained a large market share in these lending segments despite the still challenging lending market.”

“The Group’s funding and liquidity position has remained healthy with its net loan-to-deposit ratio standing at 93.6% as at the end of June 2017.”

In addition, Vietnam will continue to be on the Public Bank Group’s overseas expansion plan. With the 100% foreign-owned bank license obtained in 2016, the Group has further expanded its business through the opening of 2 new branches in the first half of 2017. As at to date, it has 9 branches and is planning to open 4 more branches in the near term.”


Globetronics in a filing with Bursa Malaysia

…expects to see significant improvement in business and volume loadings from the mass production of new products from July 2017. The mass production of new products will enable the Group to register a strong recovery in its financial performance for the second half of the FY.

…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 customer. This initiative is expected to result in the manufacturing of additional new products in year 2017 and 2018.


Pensonic in a filing with Bursa Malaysia

On 28 November 2016, the Group successfully secured the distributorship for MYTV set-top-box (decoder) in anticipation of digitalisation of the Malaysian television broadcasting in 2018. By then, all households in Malaysia will require the decoders to receive television signals for continued access to Free-to-Air TV channels. This distributorship is anticipated to contribute to Group revenue in the shortto-medium term.


Sasbadi in a filing with Bursa Malaysia

…aims to accomplish what we have set out to achieve by continuing to, among others, (i) leverage on our wide distribution network to improve effectiveness of product sales; (ii) expand our product offerings by leveraging on the intellectual properties across all subsidiaries; (iii) develop and introduce new print and online/digital educational products and materials to the market; (iv) grow the STEM education related offerings via Sasbadi Learning Solutions Sdn Bhd and its subsidiaries; (v) grow the direct sales/multi-level network marketing sales via Mindtech Education; (vi) explore opportunities for tenders under the Ministry of Education Malaysia; and (vii) explore collaboration opportunities for projects that leverage on the competitive strengths.


Bursa Malaysia Bhd in a filing with Bursa Malaysia

…strong performance came on the back of increased trading activities across all segments. We are seeing renewed interest especially from foreign funds who, I am pleased to note, are continuing to return to Malaysia’s capital market since the start of the year.

…achieved many milestones in 1H2017. These include the revision to the Tick Rule on Regulated Short Selling and Securities Borrowing and Lending to create a more facilitative trading environment. The Exchange also launched the Mid and Small Cap Research Scheme (MidS) to elevate the profile of mid and small cap PLCs. The first half of the year also witnessed the signing of a Memorandum of Understanding between Bursa Malaysia and the Shanghai Stock Exchange. The agreement allows both exchanges to explore potential ways to improve visibility and accessibility to market participants in Malaysia and China, reaffirming Bursa Malaysia’s status as the gateway for investors in the region.


Heineken Malaysia in a filing with Bursa Malaysia

“Our focus on growing the cider category is showing encouraging results, delivering double-digit growth in the first half. We are also proud of our latest innovation, Guinness Bright, which strengthens our winning portfolio and makes it even more exciting.”

Contraband remains a key industry concern with the continued influx, notably an increase in Peninsular Malaysia, representing a significant revenue loss to both the industry and the Government. The growing demand for contraband is a result of the large price gap between duty-paid and contraband products due to Malaysia’s excise structure, which ranks second highest in the world behind Norway and alongside Singapore.


Chin Tek Plantations in a filing with Bursa Malaysia

Harvesting of newly mature fields in the oil palm plantation of the joint venture located in South Sumatera Province, Indonesia has been delayed due to unrest in the villages neighboring the estate. Commencement of harvesting is pending clearance by the relevant authorities. This has resulted in the joint venture suffering losses.


Tasek in a filing with Bursa Malaysia

…due to lower demand for cement in the domestic market and lower average net pricing for both cement and readymixed concrete.

The ready-mixed concrete pricing has been under pressure from the prolonged price competition in the cement market and the segment’s margin of contribution was further affected by higher cost of cartage from rising diesel cost…

…more challenging with the prolonged price competition for cement due to lower demand for cement and weak sentiment of the domestic property market. The demand for cement and ready-mixed concrete would largely be driven by demand from the infrastructure and large-scale property projects.


Pavilion REIT in a filing with Bursa Malaysia

Total property operating expenses was higher mainly due to higher maintenance cost incurred as well as higher provision for doubtful debts.

Manager’s management fee was slightly higher despite lower net property income due to the increased in total asset value. Borrowing cost was higher due to drawdown of additional borrowings for acquisition of investment properties and working capital purposes.


New Hoong Fatt in a filing with Bursa Malaysia

PBT was lower mainly due to higher manufacturing and raw material costs, higher operating expenses and unfavourable impact from foreign exchange rates.

Amid a challenging operating environment where profit margins are impacted by rising raw material costs, the Group will continue to focus on driving business growth through expanding its product range and market expansion as well as further strengthening its cost efficiency programs.


Tenaga Nasional in a filing with Bursa Malaysia

The increase in revenue was mainly attributed to the recoverability of the higher generation costs via the effective implementation of government approved Imbalance Cost Pass-Through (‘ICPT’) mechanism. The ICPT mechanism, a part of the wider regulatory reform called the Incentive Based Regulation (‘IBR’) allows for TNB to be financially neutral from any variations in generation costs and fuel prices.


Caring Pharmacy Group in a filing with Bursa Malaysia

The higher revenue was mainly contributed by the higher sales generated from existing outlets due to aggressive and extensive promotional campaign launched during FY2017.

During the quarter under review, we have established additional of 4 complex outlets, closed down 1 high street outlet and 1 specialty retail outlet. As of 31 May 2017, we have a total of 107 community pharmacies.


Kronologi Asia in a filing with Bursa Malaysia

Demand for data backup is being driven by the proliferation of data such as emails, staff and business records, legal documents and more. Compliance with tighter regulations and business continuity requirements have led to the need for companies to safeguard their data more than ever before. As recent events have demonstrated, a safeguard against ransomware is also critical for business continuity.

Beyond the continuous efforts to build on the EDM business to meet the above demands, the Group is preparing to roll out its Transnational (cross border) backup solutions targeted for Singapore, Malaysia and Hong Kong. As announced in June 2017, Kronologi has entered into a strategic collaboration with Singapore Technologies Electronics Limited (“ST Electronics”) to expand in Hong Kong. This will be the second physical point of presence after Singapore for Kronologi, which is catering to the growing demand in Asia for data storage and protection solutions.


SWS Capital in a filing with Bursa Malaysia

Shortage of workers had resulted extra cost to the Group especially in the leather upholstery sofa division which is labour intensive. The leather upholstery sofa division has been recording a declining trend in gross profit margin. The Board notes these economic challenges and does not anticipate the predicament of the shortage of labour to be resolved rapidly in the near future. With the completion of the disposal of SWSISB, this will soften the issue of shortage of workers facing by the Group.

The management is in the process to increase in productivity and investment in technology, thereby reducing reliance on labour-intensive manufacturing practices especially in wood based division.

With the acquisition of ELE, the Group has been diversified to plastic manufacturing industry with a better prospect.

Kossan targets 2020 to complete automation overhaul

“Automation is the first thing we must work on before we can talk about big data or artificial intelligence. It (automation) is a key thing. Hence, we are working on the automation of our new plant while the old lines will be revamped to improve efficiency … the building of the new plant is not only for expansion but also for transformation. New features such as automation and computerisation will be in place. Our internal target is to complete the automation of our plants by 2020.”

With the new technology, Kossan became the first Malaysian glove manufacturer in the world to be granted the “low dermatitis potential” claim in gloves by the US Food & Drug Administration. The “low derma” gloves already contribute to about 10% of the group’s earnings, said Lim, who expects the figure to jump to over 30% in two years as the patented-technology gloves have a wider area of application.


AirAsia to list Indonesian, Philippine units by 1Q18

“That’s very much in progress. Indonesia is probably ahead of Philippines but both are going to be listed. This gives us the currency to look at combining into one AirAsia, which is my ultimate dream. I’ve highlighted to the market that AirAsia is not a company that takes short-term decisions, while the market was telling us to close down the Indonesia and Philippines units. We’re a company that takes a long-term view and we invest for the long term. Not for short-term quarterly profits.”


Malaysia Airlines: ‘China contribution to hit 20% in three years’

“I have never seen a potential in my life like there is from China to Malaysia. The market from China to Malaysia … I think people just don’t grasp the size of the opportunity for tourism in this country. It could easily double within the next six to seven years. I expect the China market to move from 8% to 9% of our business currently to about 20% in the next two to three years.”


Contractor’s pull-out flags mounting cost pressures

“We (big construction companies) were looking at the prices these guys were bidding and we were scratching our heads. Some were bidding as much as 30% lower than us! If they think they can do it at those sort of prices, we are more than happy to let them do it. For us, we rather focus on projects that can make money.”

“Without naming names, there are some parties out there that are looking for financing help to do these highway projects. They simply do not have the capacity to do such large projects. There are these so-called agents running around approaching other contractors, looking for help.”

“When your margin is low, you will try to squeeze your suppliers. In the case of these elevated highways, they will try and get better prices from the precast [concrete] boys. But the precast boys have enough work to do, MRT (mass rapid transit) 2, LRT (light rail transit) 3 are keeping them busy. No need to take the risk and prop up these low-margin projects.”


Grab raises US$2.5b in latest fundraising

Grab said it has a market share of 95% in third-party taxi-hailing and 71% in private vehicle hailing in Southeast Asia, and that the company will continue to strengthen its already-leading market position and invest in its proprietary mobile payment solution — GrabPay.

“We are delighted to deepen our strategic partnership with Didi and SoftBank. We’re encouraged that these two visionary companies share our optimism for the future of Southeast Asia and its on-demand transportation and payments markets, and recognise that Grab is ideally positioned to capitalise on the massive market opportunities.”


Touch ’n Go in mobile wallet venture with Ant Financial

“The collaboration will introduce a world-class e-wallet for Malaysians, and we plan to bring differentiated products for local users.”

The JV seeks to leverage TnG’s existing market presence in Malaysia, with up to 17 million cards in circulation and six million average transactions per day across multiple services such as toll roads, vehicle parking, public transportations and retail outlets.

“As long as CIMB and TnG are concerned, this will primarily be a Malaysian business. We do not have any plans to do this in the region.”


Single authority for property market

“If you look at Bank Negara Malaysia’s (BNM) rate, the real affordable house, it has to be in the region of RM200,000 and below. That is the level where a first-time housebuyer will be able to get 90% or close to 100% financing, but the supply is not there. You talk to the private sector, their affordable house is RM500,000.”

“Today, you look at all the high-end properties in Kuala Lumpur at night, you can see only 10% of the total units have their lights on. I think this is an unproductive investment of our money in the economy.”