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 2017.12.22

Berjaya Sports Toto Q2 FY2018 Results

H.R. Owen recorded a decrease in revenue of 8% as compared to the previous year corresponding quarter primarily due to drop in sales from the new and used cars sector during the current quarter as a result of softening demand in the United Kingdom car market as well as the product life cycle of the car models available for sale. It recorded a pre-tax loss of RM4.0 million as compared to pre-tax profit of RM5.1 million reported in the previous year corresponding quarter mainly due to the decrease in revenue and also lower profit margins earned from certain new car sales during the current quarter under review.


Top Glove Q1 FY2018 Results

The improved results followed strong demand growth stemming from developed and emerging markets, where glove demand is rapidly on the rise. Further contributing to demand was the disruption in vinyl glove supply following China’s strict enforcement against polluting industries which benefited both natural rubber and nitrile glove sales. Internally, new capacity coming onstream, as well as continuous improvement initiatives in terms of automation, better production lines and cost-saving were also instrumental in contributing to the strong performance.


Poh Huat Resources Q4 FY2017 Results

In line with the sustained demand for furniture in the US market, our operations continued to enjoy strong orders from customers from the US for both the office and home segment. In particular, shipment of our new ranges of panel based home products from our Malaysian operations to the US has rammed up over the last 12 months as our efficiency improves. In Vietnam, we also commenced shipment of several newer ranges of bedroom sets for which production runs is expected to smoothen over the next few months. Overall the Group expects this trend to continue for the remaining financial year.


Comfort Gloves Q3 FY2018 Results

Nitrile glove now accounts for 61% of Malaysian rubber glove export. As overall demand for nitrile gloves increases, the market is seeing increase segmentation and differentiation leading to an increase demand for specialty gloves. Through dedication to process rationalization and improving operational agility, the Group is confident in capturing greater market share and strengthening margins. The Group is confident that meeting customer expectations and continuous innovation will strengthen our position as the bespoke specialty glove manufacturer.

CAB Cakaran set to fly even higher after record year

Next year, Chuah said the group intends to increase broiler meat capacity to about 7.5 million birds per month, and up to 11 million birds a month for day-old chick. “We will not expand for the sake of expanding. For the broiler business, expansion is not an issue as long as we got the money and the land. But the key question is whether the demand is there,” he said.

Chuah said CAB has budgeted a sum of about RM50 million as capital expenditure for FY18, to upgrade the group’s facilities and machinery. “These upgrades are meant to cater for additional market demand. If we want to grow on a larger scale, we will have to look into the existing market, so we are also on the lookout to buy medium or smaller broiler businesses, especially those businesses that have no second generation successors,” he said.

“The construction will take about 12 months to complete and contribution will likely begin in 2019. We are targeting 4.5 million birds per month for the broiler and three million eggs per day for the layer in 2019. We currently hold 10% of the joint venture, and over the next five years, we have an option to increase our stake to 30% based on the inception price. In that way we don’t have to incur so much expenditure now.”


Kulim plant to boost Osram’s output to near market-leader’s level

“For more than one decade, Osram has been a strong number two in the market for opto semiconductors for lighting with a market share of more than 8%. With our new capacities in Kulim, the gap to the number one (Nichia Corp) will shrink further.”

“In our opto-semiconductor business, we have reached an operating margin of more than 28% before the opening of our new fabrication plant (in Kulim). Our target for the coming years is between 25% and 29%. Of course, the cost factor in Malaysia plays a role but our venture in Kulim is more about raising capacity for a still growing demand.”

“The market continues to be dominated by the replacement of traditional lighting with efficient LED lighting, while the LED share in the automotive segment is growing rapidly in interior lighting, and headlights. We also are developing exciting technologies for autonomous vehicles and using our LED chips; we are enabling new technologies for vehicle sensing, orientation and navigation. Our horticulture lamps are designed to grow leafy greens and herbs in a controlled environment, ensuring plants receive the best light to grow to their fullest potential with improved flavour.”


Techfast to source chemical products from China’s Tecore

Cape and Oriem will be Tecore’s Malaysian business partners to engage in the supply and sale of Tecore’s products, including clear epoxy molding compound and silicone phosphor film.

Techfast said Cape and Oriem will sell these products to its customers, which are multinational companies that engage in the LED business.

The group said Cape and Oriem’s services also include product evaluation testing, customer demand information collation and customer supply chain co-ordination on behalf of Tecore as its local business partners.

e-Conomy SEA spotlight 2017: Unprecedented growth for Southeast Asia’s $50B internet economy

There will be 330M monthly active internet users by year-end 2017, adding over 70M new users since 2015 at 13% CAGR. In Southeast Asia, mobile is the internet, as more than 90% of Southeast Asia’s internet users are on smartphones. It is hard to overestimate the absolute prominence of mobile as the access point and driver of Southeast Asia’s internet economy. Users in Southeast Asia are incredibly engaged, spending an average of 3.6 hours per day on mobile internet,1 more than in any other region in the world.

We estimate that Southeast Asia’s internet economy will reach $50B in 2017. Growing at 27% CAGR, it has outpaced the 20% 10-year CAGR projected in Google-Temasek e-Conomy SEA and is on a solid trajectory to exceed $200 B by 2025. All sectors of the internet economy have experienced solid growth in 2017. Online travel reached $26.6B led by growth in airline and hotel online bookings. Online media touched $6.9B driven by online ads and gaming. E-commerce and ride hailing have been under the spotlight growing the fastest at over 40% CAGR, capturing consumers’ preferences with evolving business models, and attracting the majority of the investments in the region. As a result, they are the focus of Google-Temasek e-Conomy SEA Spotlight 2017.

GLCs are crowding out private investment — IDEAS

“An often-cited concern relates to the preferential treatment that they receive with respect to government procurement. They could also enjoy various other benefits, including direct subsidies, concessionary financing, state-backed guarantees, and exemptions from antitrust enforcement or bankruptcy rules. Hence, GLCs find it easier and more profitable to increase investment in sectors which they already have a significant presence — a level of involvement usually made possible by their special and preferred status to begin with.”

“The results revealed that when GLCs account for a dominant share (60% or more) of revenues in an industry, investment by private firms in that industry is significantly negatively impacted. Conversely, when GLCs do not dominate an industry, the impact on private investment is not significant.”

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.

Company Notes 2017.10.27

British American Tobacco Q3 FY2017 Results

The Group registered market share decline from 54.5% in the second quarter of 2017 to 53.9% in the third quarter of 2017. Dunhill, the biggest Premium brand in legal market, registered 38.4% market share in the third quarter of 2017 (-0.6% versus previous quarter). The decline is mainly due to the prevailing high level of illegal cigarette incidence at 56.1% as of August 2017 (Source: Consumer Track by Kantar Research Agency) as well as the growth of a lower price segment within the legal market.

In relation to the cessation of the manufacturing operations announced on 17th March 2016, the Group has further recorded a one-off restructuring expenses of RM7.9 million as of year to date September of 2017 which consisted of on-going cost of the project, outplacement programs and one off expenses associated with the storage and transfer of unprocessed leaf and raw materials.

 

Maxis Q3 FY2017 Results

Demand for data continued to grow with 6.0 million 4G LTE users (3Q16: 4.1 million) and an average usage of 7.4GB per month (3Q16: 4.4GB). This was supported by the increase in smart-phone penetration which stood at 80.3% against 73.7% on a blended basis. The Group continued to lead the market with its expanded 4G LTE network at 89% population coverage, enabling customers to enjoy high speed and unmatched digital experience. In addition, the Group recorded an all-time high touch point net promoter score of +52 in the current quarter compared to +41 in Q3 2016.

 

Bursa Malaysia Q3 FY2017 Results

Bursa Malaysia-i , as the world’s first fully integrated end-to-end Shariah-compliant investing platform, will continue to intensify its efforts to promote Shariah investing in the market. Meanwhile, trading activities in Bursa Suq Al-Sila’ (“BSAS”) continues to record improvements. Bursa Malaysia will continue with its efforts to expand BSAS reach in new regions such as North Africa and Central Asia.

Bursa Malaysia recorded a significant milestone with the launch of the Leading Entrepreneur Accelerator Platform (“LEAP”) Market in July to assist small and medium enterprises (“SMEs”) to raise funds from the capital market for their business expansion. The LEAP Market went live on 3 October with the successful listing of Cloudaron Group Berhad.


Gadang Holdings Q1 FY2018 Results

On-going projects i.e. RAPID package 301 and 402, KVMRT V206 and TRX are executed on a fast track basis to optimise on cost saving and design effectiveness. With the latest award of Cyberjaya Hospital in August 2017, the outstanding order book of the Division has increased to RM1.98 billion.


Public Bank Q3 FY2017 Results

The Group’s Common Equity Tier I capital ratio, Tier I capital ratio and total capital ratio stood at a healthy level of 11.7%, 12.4% and 15.4%. The Group’s liquidity position also remained stable and healthy with Loan to Fund ratio standing at 88.6% as at 30 September 2017.

Tan Sri Teh said, “The Public Bank Group has always focused on asset quality in the pursuit of business growth. Thus, the Group has been able to sustain its stable asset quality even in challenging times. As at the end of September 2017, the Group’s gross impaired loan ratio of 0.5% continued to remain the best in the domestic banking industry.”


Lotte Chemical Titan Q3 FY2017 Results

Overall market started off moderately in Q3 2017 after the Hari Raya holidays. Market demand rebounded by late July following the Chinese government’s announcement to ban importation of plastic scrap by end of 2017. The capacities taken offline caused by Hurricane Harvey in United States had temporarily affected supply from United States, especially to Latin America. The market was briefly lifted up as concern on the supply disruption from US lingered. Meanwhile, supply from other regions was reportedly diverted to Latin America to fill the void.

Group plant utilization was lower at average 77% compared to average 92% in corresponding quarter. This was mainly due to statutory routine turnaround (every 5-6 years) for Cracker 1 plant in Malaysia and Indonesia polyethylene plants load was reduced during the quarter due to poor polyethylene economics as a result of tight ethylene supply and high cost.


Texchem Resources Q3 FY2017

The revenue recorded for YTD Q3 2017 was RM192.2 million against RM164.3 million in YTD Q3 2016. The Restaurant division incurred pre-tax loss of RM1.6 million against pre-tax profit of RM4.3 million in YTD Q3 2016 mainly due to closure costs of RM5.2 million arising from cessation of business by a subsidiary and losses from new concept restaurants.


Suiwah Q1 FY2018 Results

The Manufacturing division experiences high prospect projects entering commercialization stage during the past few months. The Group foresees continuous growth in the flexible electronics sphere. The new expansion project at Batu Kawan has also taken off and the rate of construction work is progressing in accordance with the milestone target. The Group will continue its mission to create and add values to all customers, employees, and shareholders by delivering innovative, competitive and quality interconnect technology solutions.


WZ Satu Q4 FY2017 Results

For civil engineering and construction segment, the Group not only accumulated an order book to last for the next two to three years but also the Group is confident that its order book will grow beyond the run-off rate. The outlook of this sector is promising with the Group benefiting from Government expenditure in infrastructure.

Full restoration of plant may take up to 1 year, says Notion VTec (filing to Bursa Malaysia)

It has affected more than 552 Computer Numeric Control (“CNC”) machines and Work-in-Progress (“WIP”) goods and the Quality Control “QC” building but not the rear building and the surface treatment plants are good and operational.

Notion has adequate insurance coverage – RM350 million for property damage, RM217 million for business interruption up to 18 months. The preliminary estimate of the loss is about RM150 to 200 million. Once we gain access to the site we shall be able to assess the extent of damage and provide a more accurate estimate of loss.

At this moment, the Company estimates the affected segments are the camera, Hard Disc Drive top clamps and automotive parts but the Company will re-commence production in Factory 3 using any spare capacity that Notion has as well as sourcing and renting suitable CNCs and if needed, rent additional floor space to meet current and new customers’ requirements. It is not easy to outsource to other machinist companies as it requires safety certification and approved vendor which will take time. Notion is committed to restoring the orders to the customers’ requirement.

The immediate effects of this outage in this affected Plant are about 50 to 60% of the Company sales revenue but with the fast recovery plan, Notion will have restored 75% of the outage progressively within 5 months and the balance within another 3 months. But of course, the full restoration of structure and Certificate of Fitness may take up to a year.

 

Comintel to give special cash dividend after sale of subsidiary (filing to Bursa Malaysia)

The buyer is Aurelius Holdings Sdn Bhd, a newly incorporated investment holding company, where Comintel executive director Loh Hock Chiang is also a shareholder of Aurelius. As at 29 August 2017, Loh holds direct interest of 0.07% in Comintel. Comintel’s CEO of Comintel’s manufacturing segment Lee Chong Yeow is also a shareholder of Aurelius.

Comintel said the proposed disposal will give the company the opportunity to unlock and realise the value of its investments in BCM Electronics. BCM, which is involved in electronics manufacturing services, provides turnkey manufacturing services. Comintel said “there is limited leverage to further increase the competitive edge of the electronics manufacturing services (EMS) and EMS-related industries.” If Comintel is unable to continue to maintain the competitiveness of the EMS business, there could be adverse impact of potentially losing its key customers to its competitor’s, the filing said.


Thriving Top Glove believes growth is sustainable

“We are very fortunate to operate in a growing industry. Not only demand for medical gloves is growing but even the food industry, such as in the restaurants and supermarkets, is using a lot of gloves, especially disposable gloves. Demand is growing, so growth is definitely sustainable. To grow by 10% a year in any industry is very good and we have been growing for the past 30 years.”

“Margins over the past 15 years is about the same, which is about 10% for net profit margins. I think these margins are reasonable. Profit margins, which are too high at 30%-40% in the manufacturing industry, won’t last. You will invite competition when your margins are too high. Margins which are too low will affect the industry as it cannot grow well. I think net profit margins at the 10% level is sustainable and will likely continue for the next 10 to 20 years.”

“On average, our revenue per worker per year is about RM250,000. This figure is better than an electronics factory, which is about RM200,000. Some 10 years ago, we were only at RM150,000. So we have improved a lot, much more than an electronics factory.”

Surgical gloves are thicker than the normal gloves due to requirements during surgery. It also requires more raw materials per piece to manufacture. Top Glove presently only produces 2% of surgical gloves compared to its total product mix by sales quantity. “It is certainly good to consider expansion in terms of acquisition for surgical gloves. We are No. 1 in terms of examination gloves and rubber gloves that is exported from Malaysia. When it comes to surgical gloves, we are at No. 4 or 5. It is also in our plans to tap into the growing market of surgical gloves.”


This little known Malaysian stock has surged 400%

“The margins are beautiful,” Yap, 61, said in an interview at the company’s headquarters on the outskirts of Kuala Lumpur, referring to the Manno tie-up. Clients in those sectors are willing to pay more for quality machined parts, such as shoulder screws used to secure protective casings for sensitive equipment, he said.

The company, which supplies its mold-cleaning rubber sheets to about 70 percent of Malaysia’s chipmakers, is expanding into markets like Taiwan and China after winning clients including Chinese chip-testing company Tianshui Huatian Technology Co. “There’s a reason why we control the market here, and Tianshui as a client is a testimony to our capabilities,” Yap said. The manufacturing process may seem simple, but “it’s difficult to replicate,” he said, adding that there’s plenty of room to expand in those countries: while they require about 180 tonnes of rubber-cleaning sheets per month, Techfast currently only supplies about 12 tonnes.

Still, for Yap, the share-price surge is just the start. He says he plans to return 40 percent of the company’s net income to shareholders starting this financial year, up from 26 percent in 2016. The “big leap” in profit will be in 2018, he said.


Favelle Favco’s next phase of growth

Although the decline in oil prices for the past three years has not deterred the company’s growth, Favelle’s orderbook replenishment is slowing down. This is because more than 60% of its business is in the offshore oil and gas (O&G) cranes. As such, diversification has been part of the company’s plan. Presently, it has an orderbook of RM536mil, halved from its orderbook in 2014 of RM1.02bil. Earnings wise, the company saw its net profit grew marginally to RM32.3mil in the first half ended June 30, 2017, from RM31.3mil a year ago.

Favelle says it has inked a heads of agreement to acquire 70% stake each in Exact Automation Sdn Bhd, Sedia Teguh Sdn Bhd, Exact Analytical Sdn Bhd and Exact Oil & Gas Sdn Bhd. These companies are primarily involved in the provision of engineering services, industrial automation solutions, and specialised equipment mainly for the O&G industry.

It is worth noting that Favelle has about 40 years experience in the crane business. With the O&G sector starting to gain traction as crude oil prices continue to stabilise, it is timely for Favelle to embark on its next phase of growth.


Higher capacity boost for Hartalega

The world’s largest nitrile glove maker, which has been enjoying an average year-on-year revenue growth of 28% for the last 13 years, has attributed the stronger growth to the expansion of its production capacity.

At an investment of RM2.2bil, the NGC will comprise six state-of-the-art manufacturing plants housing 72 of the most technologically advanced production lines in the industry. Upon completion, the NGC will see Hartalega’s total installed capacity increase substantially to 42 billion pieces per annum from the current 29 billion pieces. Over the next five years, Hartalega aims to have an average growth of 15% per annum in terms of manufacturing output via capacity expansion.

On the likelihood of diversification to rubber products, he said the company would not undertake such an exercise. “We don’t plan to diversify. This is because our profit margin is double than the industry average. Furthermore, we have the competitive advantage in terms of strength and there is good potential for future growth in the glove business.”


Caring to launch digital platform

“We want to streamline all our channels, from our [present] bricks and mortar stores and e-commerce store to a website and mobile app, for our customers’ convenience in enjoying a seamless shopping experience. Customers can order products and have them delivered to their doorstep, or if they want to save on courier charges, they can order online from home and pick up their products from our outlets three days after.”

As of Aug 31, 2017, the group operated a total of 110 pharmacies, Chong said, adding that it plans to open 10 to 12 new outlets a year.

“We are conducting surveys and studies on locations in the east coast of Peninsular Malaysia, Sabah and Sarawak to prepare for our expansion there. Last month, we opened [a branch] in Kuantan and in December, we will open a branch in Kota Baru. We have identified a site in Sabah where we plan to open [an outlet], hopefully in six months. [Our aim] is to be a complete national player,” said Chong.


Nationwide Express sees Airpak buy as growth catalyst

The acquisition of Airpak, Rosilawati said, fits in with the group’s strategy of expanding its business-to-consumer (B2C) or consumer-to-consumer segments, which currently account for just 5% of Nationwide’s revenue. The bulk of its revenue is derived from serving business-to-business (B2B) customers.

While Airpak’s courier business is seen as complementary to Nationwide’s existing operations, the acquisition of MTR is geared towards the group’s diversification, expansion, and long-term sustainability, she said.


MAHB on connectivity goal

“By having Alibaba here, the programme would help startup to establish e-commerce and transaction and payment. When you have access to global market, the growth rate of e-commerce would be in a single-digit but once the ecosystem is implemented, it will quickly jump into high double-digit.”

“Commercial airlines have the opportunity to carry e-commerce cargo, which in turn would boost airlines profitability and good for the airport. Thus, airlines would also look at other opportunities to either same or introduce new destinations.”

“The aviation industry is about inbound foreign direct investments. For example Boeing and Airbus will save 40 per cent of their new aircraft deliveries over the next 10 years in Asia. Aircraft manufacturers need to move a lot of those activities in Asia to serve their customers. They need to open up more MRO centres.”


ES Ceramics seeks new revenue streams

“We want to further diversify our portfolio to include complementary new products within the dipping industry. It does not help that key glove makers have been expanding so aggressively over the years. There is a price competition because some players are hungry. Why? Maybe they have increased capacity, but utilisation has not caught up.”

On its part, ES Ceramics has diversified from producing moulds for different glove types — examination, household, industrial and specialty — to include breathing bags and balloons as well. Wong did not reveal the latest products that ES Ceramics is looking to include in its list, noting that discussion is still at its infancy stage.

“We do not have the advantage of some manufacturers who can purchase turnkey machinery [to adopt automation]. Our machinery needs to be modified and tested. For that, we need engineers. But some engineers are from fields that are relevant to our operations, and some are inexperienced. We have been hiring and firing, that has caused our staff costs to increase slightly, but that will stabilise when the right team is established to speed up the adoption.”

“Right now, our factories are not applying automation at a significant level,” said Wong. The group is currently focusing on less critical parts of the manufacturing line to allow for more room for modifications. “The first objective is to make sure automation can work before it is being applied across the board. Only then can we look at improving quality,” he said, without giving a timeline for the adoption to be meaningful to ES Ceramics’ financial performance.


Perodua has no plan to introduce EVs in Malaysia yet

Daihatsu holds a 20% stake in Perodua and is also the latter’s technology and technical partner.

“I would rather we focus on our bread-and-butter internal combustion engine (ICE), which is energy efficient and can still be used in Malaysia. What we’re doing now is looking at how we can realise the full potential of this engine in terms of fuel consumption. Until such time we cannot improve on it anymore — that is, once it already reaches its full potential — then only we’ll consider EVs.” Zainal said it does not make sense for Perodua to venture into EVs now as the infrastructure that is needed to support such technology, such as charging stations, is not yet widely available in Malaysia.

He explained that the government’s policy on EVs is two pronged — to try to bring down the cost of EV production by allowing lithium-iron batteries to be produced in Malaysia, and to install more charging stations nationwide. He said there are currently 230 charging stations being installed and it is expected that by 2020, there will be 1,000 stations.


Pensonic eyes IoT market

“We have not committed ourselves to a time frame for the IoT project. But we can safely say that we are committed to the project, which is now part of five-year business strategy. The Malaysia IoT Consortium (MyIoTC) is looking into creating an IoT ecosystem so that it could better tap into the IoT business opportunities worldwide, leveraging on the members’ respective strengths and area of specialisation.”

On the local front, Weng Khak said the company has been granted nationwide MYTV set-top box (decoder) distributorship in anticipation of Malaysian television broadcasting going digital in 2018. “The decoders would be a required item to receive television signals for continued access to Free-to-Air TV channels. The management is of the view that this distributorship would contribute to the group’s revenue in the short to medium term.”


Top Glove’s Lim buys 10.24% of Tropicana

The transaction price was not disclosed in the filing with the stock exchange. Based on yesterday’s closing of 93 sen, Lim’s 10.24% stake will cost him RM139.6 million.

“Over the years, Tropicana has proven itself by delivering high-quality and iconic projects to its customers. With my business experience, and regional as well as international contacts, I hope to contribute positively in moving Tropicana up the value chain.”


TMC to expand bed capacity to 1,100 in five years

“We are hoping to achieve this target if, and only if, we manage to complete the expansion of our capacity at Tropicana Medical Centre, as well as get the health ministry’s go-ahead to kick-start the Iskandariah Hospital in Johor. Most importantly for us is to expand our current facilities first, as we bank on the growing local population and increasing demand for medical services. Gradually, I am hoping the facility in Kota Damansara will reach to 600 beds by 2020.”

The construction of the additional facilities on a six-acre (2.43ha) land in Kota Damansara, serving a neighbouring population expected to increase soon to 200,000, will take three years to complete and cost around RM300 million. The centre’s overall weekly utilisation rate is 60%.

“We are also planning to open a fertility centre in East Malaysia. Hopefully, this will garner more interests from the locals and tourists. We recently celebrated the delivery of the 1,000th baby born via the in-vitro method. Obviously, this business is doing well.”


TNB’s net profit could fall by RM1b p.a. if 2% tariff mark-up removed, says CIMB Research

Under the IBR framework RP1 (2014-2017), TNB’s return on its transmission and distribution (T&D) assets is 7.5%, said CIMB Investment Bank Bhd in a note to clients today. However, its actual average tariff is about 2% higher than the base tariff set by the IBR due to higher electricity consumption by the commercial sector.

“As such, when the regulator revises the IBR parameters for RP2 starting in 2018, the allowable return may be lowered and we see potential earnings risk as it may no longer enjoy the additional 2% tariff,” said its analyst Ngo Siew Teng.

“Assuming TNB is only allowed to earn a 6.5% return (its weighted average cost of capital based on CIMB estimates) on its T&D assets and the 2% mark-up in tariff is entirely removed, we estimate that TNB’s net profit could be lowered by as much as RM1 billion per annum. This, plus the risk of a higher effective tax rate, may lead to a RM2 billion reduction in TNB’s annual net profit,” she added.


Plywood prices on uptrend

“Delay of shipments is about three to four months now, and port inventories are down in Japan while the demand continues to be strong. Plywood mills operate with very little log inventories. Also quality logs are hard to come by now,” revealed International Tropical Timber Organisation (ITTO) report in its latest issue. Reduced supply volume and higher export prices will continue.

“Floor base plywood demand has been shifting to domestic softwood plywood. Demand for softwood plywood is brisk mainly by large precutting plants. August softwood plywood production was high at 254,700 cu m, 10.8% more than August last year. It is a fact that domestic plywood is now more than imported plywood in Japan but imported plywood is absolutely a necessary product for Japan. But in the coming years, the (Japanese) market would not accept any product without traceability of forest certificate.”

“In Indonesia, 40% of total harvest is now planted timber and in Sarawak, share of planted timber in total harvest will be more than 50% in five years.”

Tax laws must not be complicated

Seah noted that the government had in recent times amended the laws after losing out in court disputes with taxpayers. The CTIM, she added, supports amendments that are made for tax laws to stay relevant to current trends and to maintain their original intent. “However, amendments [made] after the loss of a tax case are often drafted with a very wide scope to cover any imaginable circumstances and they [the amendments] sometimes unintentionally affect other taxpayers and put them in a difficult position,” said Seah.

Seah said policymakers should have guidelines and implementation plans ready to be rolled out immediately after amendments are proposed. Similarly, for all the rulings, Seah opined that the effective date should not be on a retrospective basis.

To avoid hiccups in implementation, communication between different government agencies and policymakers is essential to enable harmonisation of laws whenever there are changes or implementation of new rulings.

Company Notes 2017.08.25 (Part 1)

Malakoff Q2 FY2017 Results

The results for the financial year ending 31 December 2017 will be affected by the lower capacity payment in the new revised Segari Energy Ventures Sdn Bhd’s Power Purchase Agreement commencing 1 July 2017.


Fiamma Q3 FY2017 Results

The new integrated logistics warehouse has improved the operation and cost efficiency of the Group and will also be able to generate a recurring income stream for the Group from the provision of storage space and logistic services to third party customers.


TH Plantations Q2 FY2017 Results

“The recovery in production and replenished stock levels throughout the industry have inevitably cause some downward pressure in CPO and PK prices, and we have seen average prices normalising down from their recent highs. However, we remain optimistic that the prices will still remain supported by increased demand for palm oil products, particularly in view of higher soybean oil prices in the United States.”


APM Automotive Q2 FY2017 Results

… lower demand from OEMs. ..lower revenue and higher operating costs from the newly completed plants overseas.

…profitability will be pressured by higher operating costs from the new overseas operations such as Thailand and Indonesia. These operations will focus on driving sales with an internal emphasis on efficient resource management, cost containment and increased technical training of workers to improve production efficiency.

…level of investment will not be curbed in the face of declining profitability… continue to expand its product range and to diversify geographically its reliance on one market.


Nestle Malaysia Q2 FY2017 Results

Compared to the second quarter of last year, the prices of major raw materials such as milk powders, coffee beans, and palm oil had increased by some margin.

Examples for the successful product launches in H1 2017 are MAGGI Hot Mealz, MILO “KAW”, KIT KAT Mini and MAT KOOL Panda Ice Cream.


Rubberex Q2 FY2017 Results

the provision of unrealized foreign exchange losses on investments held in China and higher costs of production, especially latex and resin, key components of our manufactured products.

The first phase of our nitrile disposable gloves project is currently operating at 80% capacity and is expected to be fully utilized by the second half of the year.

The Group is now embarking on the second phase of expansion with the proposed installation of two production lines that would increase the current installed capacity by another 500 million pieces to 1.5 billion pieces annually, however, commercial production is only expected to commence by the second half of 2018.


Evergreen Fibreboard Q2 FY2017 Results

due to higher log and glue cost…Production volume was reduced as a result of shortage supply of rubber wood and scheduled plants shut down for maintenance during the Ramadan festive period.


Star Media Group Q2 FY2017

On 12 May 2017, the Company announced that Laviani Pte Ltd, a wholly-owned subsidiary company, entered into a conditional share purchase agreement with Lucrum 1 Investment for the proposed disposal of its entire equity interest in Cityneon for a disposal consideration of SGD115,612,731 (equivalent to RM360,179,902) to be satisfied entirely via cash.

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.

The Group has recently embarked on its next digital transformation plan with the launch of dimsum.my, its very own video-on-demand service. It offers Asian content and much of it on an exclusive basis. Currently, we are also building its library content to secure a much higher subscribers base.

All TV broadcasting companies globally are facing headwinds and with digital disruption within the media industry, the Company does not expect a turnaround from Li TV. In view thereof, the Board has decided to cease the business operations of Li TV Group to mitigate further losses.


Hock Seng Lee Q2 FY2017 Results

With a record order book of RM3 billion in hand, the Group is now busy on work execution. Nevertheless, the Group will continue to bid for projects that are related to our core business in infrastructure works. Our procurement initiative shall be undertaken in line with our prudent project management strategies, taking due consideration of the capacity and capabilities of the Group. The Sarawak Corridor of Renewable Energy (SCORE) initiative, as well as the forces of industrialization and urbanization, provides further contract opportunities for HSL in the key SCORE growth node towns of Tanjung Manis, Mukah and Samalaju and the major cities of Sarawak. HSL foresees the property development segment, with a variety of products on offer, will make a greater impact on the business of HSL Group in 2017.

“While we are busy executing contracts across the state, we are also experiencing some pressure on margins as demand for materials, labour and sub-contractors has pushed up operating costs.”


Kerjaya Prospek Group Q2 FY2017 Results

The outstanding performance, especially in the construction segment, has mitigated the slowdown in the manufacturing segment which was due to completion of existing projects.

The Group’s outstanding order book stands at RM2.5 billion as at the current financial quarter. In addition, the construction division has secured about RM362 million worth of jobs as at the financial quarter.


Ta Ann Holdings Q2 FY2017 Results

The Group’s log harvesting policy is in compliance with our certification exercise. The reduction of log export quota from 30% to 20% effective 1 st July will channel more proportion of logs harvested to the mills for processing. We have strategically revised our plywood production to processing more products with higher plantation and certified woods components as we are stepping up harvesting of our plantation logs and utilization of imported PEFC certified eucalyptus veneer. To-date, plywood products prices have gone up by USD25/m3 and with higher demand, we anticipate the price uptrend to continue.


Boon Koon Group Q1 FY2018 Results

The prospect of rebuilt commercial vehicles business in Malaysia is expected to remain challenging for the year ahead, with continuing weak consumer sentiment and stringent hire purchase lending rule.

Instead of overdependence on its existing business, the Group via its subsidiary, BKG Development Sdn Bhd, a wholly-owned subsidiary of the Company has proposed to diversify into the property development segment with strong growth prospects with Platinum Eminent Sdn Bhd.


Salutica Q4 FY2017 Results

Bluetooth headsets contributed approximately 94.6% or RM48.9 million of total revenue for the current quarter. Non-Bluetooth products and in-house brand FOBO made up of the balance 5.4% of total revenue for the current quarter.

…due to the deferment of new product launch to the following quarter. This had affected the absorption efficiencies of fixed and variable overheads.

One of the models to be shipped to one of its major customers in the second half of CY2017 will be a new form factor of Bluetooth headsets.

The Group expects the sales of its in-house brand FOBO to grow by increasing the marketing and sales activities through expansion of sales distribution channels and promotional activities. Currently, the Group is marketing FOBO Tire, which is a tire pressure monitoring system for light vehicles, as an OEM after-market accessories to automotive brand owners. FOBO Ultra, which is for heavy vehicles continue to receive encouraging response from commercial vehicles and fleet companies. The Group expects to grow and expand in tandem with the market response.


Pecca Group Q4 FY2017 Results

Revenue from leather car seat covers contributed approximately 73.71% of total revenue followed by leather cut pieces supply which accounted for approximately 18.36% of total revenue during the quarter under review. OEM leather car seat remained the largest contributor segment accounted for approximately 39.94% of the total revenue for leather car seat covers whilst REM and PDI contributed approximately 21.99% and 11.78% respectively.


Classic Scenic Q2 FY2017 Results

…lower export sales revenue from wooden picture frame moulding as the market demand for the wooden picture frame in North America remained flat…The input cost of the Group’s major raw material and timber was fairly stable in the first six months ended 30 June 2017.


Techfast Holdings Q2 FY2017 Results

In order for TPSB to become a one stop center for the military and aerospace business, arrangements had also been made with the said customer as above mentioned to transfer their broaching machines from the USA to the company. As such, these machines will enable customers to source from TPSB as a one-stop center for finished products instead of semi-finished products currently, where further enhancement processes are required.

Cape has dominated the Malaysian market with more than 70% market share of products supplied to most of the semiconductor companies in the country. It has also captured over 40% of the market share in South East Asia. However, the biggest markets for Cape’s products are in China and Taiwan where the monthly market demand for rubber sheets in China and Taiwan is about 150 tons and 30 tons respectively, out of which Cape has about 6% market share.

Oriem, on the other hand, is working on some high end LED and epoxy projects with two reputable international original equipment manufacturers in Penang. Oriem is already an approved vendor which meets the standards and requirements of their supply chain. Our company’s new products are now in the final stages of evaluation by the OEM companies and we expect a business deal to be clinched soon.


Rhone Ma Holdings Q2 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, which will increase our production capacity by approximately 4 times of the existing maximum production capacity.

We have commenced work on our new warehouse situated in Kampar on 21 July 2017. The new warehouse, which will be used as our main distribution center to cater to our increasing storage needs for both animal health products and food ingredients, estimated to be completed by 3Q 2018.


Focus Lumber Q2 FY2017 Results

The Group’s production unit cost had surged every month and decreased our profit margin as a result of poor production in the current quarter.

We expect the profit margin of our products to be impacted if the supply of logs issue persists. Currently, management is actively looking for alternative supply of logs, which includes purchasing veneer sheets from local timber companies.


Dagangan NeXchange Q2 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-togovernment services.

The award to supply Portable Container Systems (“PCS”) for petroleum products by Petro Teguh (M) Sdn Bhd, is in line with our plan to pursue opportunistic contracting work in Oil & Gas downstream sector leveraging on OGPC’s expertise in delivering innovative engineered systems in short-cycle projects. This PCS project augurs well with our strategy to expand on the Group’s Energy division and further strengthen this business segment and provide growth moving forward.


E.A. Technique Q2 FY2017 Results

The higher cost of EPCIC was mainly due to additional request for work from the client, of which we will pursue for its recovery in future quarters. The increase in administrative expenses was due to discount on receivables and amortization of goodwill for the acquisition of Libra Perfex Precision Sdn Bhd.

The Group remains optimistic on its operating performance in view of the deployment of FSU Nautica Muar, the chemical tanker and oil tanker in Q3 2017. The overall performance of the Group will depend on the closing of the EPCIC project.


BP Plastics Q2 FY2017 Results

…higher resin costs which the Group was unable to completely pass through to its customers in order to maintain price competitiveness.


UMW Oil & Gas Q2 FY2017 Results

In the second quarter of 2017, five out of the Group’s seven jack-up rigs were income-generating with four of them contributed full-quarter revenue thereby achieving an overall asset utilisation rate of 68%. However, the positive effect from higher asset utilisation was offset by the lower time charter rates as well as zero contribution from Naga 1, a semi-submersible rig, which disposal was completed on 9th May 2017.

While asset utilisation is improving for the second half of 2017, the charter rates continue to remain soft, in line with prevailing market rates.


Ann Joo Resources Q2 FY2017

The Group’s earnings were affected by 1) lower sales tonnage on softer domestic demand which was affected by various factors affecting the construction industry; 2) higher finance cost due to recognition of RCPS unwinding of discount; and 3) recognition of LTIP – share based payments expenses of RM1.06 million.

Global steel supply is expected to be affected by: i. Potential output cuts by Chinese steel mills over winter; and ii. Potential production constraints faced by electric arc furnace operators globally given shortages in graphite electrodes worldwide. This expected demand-supply imbalance should enable the Group to be in an advantageous position as a hybrid Blast Furnace-Electric Arc Furnace (“BF-EAF”) operator with high degree of operational flexibility.


MWE Holdings Q1 FY2018 Results

The construction of both factories in Vietnam (Textile division) and Penang (Telecommunication division) has been completed. New production lines will be gradually increased in our Vietnam factory during this financial year. As for the Penang factory, the production is fully operated after the relocation from the previously rented factory. With the additional new facilities, the management expects the expansion and development of new products will further enhance the future earnings of both divisions.


Plenitude Q4 FY2017 Results

70% of Group’s revenue was from property development and 30% from hotel operations.


IHH Healthcare Q2 FY2017 Results

Parkway Pantai expects revenue to increase with aging demographics, more complex cases undertaken in its home markets and the ramp up of its new hospitals. As Parkway Pantai embarks on its next growth phase, it would focus on markets, such as China and India, where there is robust demand for quality healthcare services.

While the Group expects the pre-operating costs and start-up costs of new operations to partially erode its profitability during the initial stages, the Group seeks to mitigate the effects by ramping up on patient volumes in tandem with phasing in opening of wards at these new facilities in order to achieve optimal operating leverage. The Group expects higher costs of operations arising from wage inflation as a result of increased competition for trained healthcare personnel in its home markets.


Spritzer Q2 FY2017 Results

We will continue with our marketing and sales efforts so as to improve our sales of bottled water in Guangzhou, China and in Malaysia. We will also continue with our market development and brand awareness activities in China. We remain confident that the sales of our bottled water products will be sustainable in the domestic market. We are also taking firm steps to improve our business operations in China.

La Nina to hurt air-con sales this year — Daikin

As the blistering heat of El Nino gives way to increased rainfalls under its wet cousin La Nina across Southeast Asia this year, air conditioner (air con) sales are expected to cool.

“I don’t think we will see similar [sales] numbers this year, as the market is shrinking. In the last two years, Malaysia and a major part of Southeast Asia were experiencing very hot El Nino weather and [air con] brands actually could not meet demand and ran out of stock in the months of April to June.”


Malaysia is IKEA’s near RM1 billion Asean distribution and supply chain hub

IKEA will invest RM908 million for the new centre, which will adopt the structure and technology of IKEA’s biggest regional distribution centre in Germany. IKEA will manage an inventory of 9,500 stock keeping units worth RM6.6 billion annually.

“With the establishment of the regional distribution and supply chain centre, Malaysia will strengthen its role in supporting IKEA’s growth in the Asean region. The centre will serve 12 retail stores in Asean, which will increase to 20 stores by 2026.”

Urgent need to regulate healthcare fees

…the central bank will come out with a framework as soon as possible to reduce the medical insurance rate, which is projected to rise to 12.7% this year.

…rising medical insurance in Malaysia and other countries in the region is partly due to unregulated rules.

“While doctors’ fees are regulated, other components of private hospital charges are not. We need a framework on private hospital charges so that prices remain fair and appropriate. Consumers are advised to request for more detailed billing of charges, breakdown of cost of treatment and medicines provided to them.”

Other components of hospital charges not regulated include fees for hospital stay, laboratory investigations, nursing care, use of equipment and operation room and drugs.