Sunday, March 31st, 2019
TASEK GELUGOR, March 31 — The Rural and Regional Development Ministry has allocated RM20 million this year under Harapan Entrepreneurship Realisation Strategy (HERS) Fund to assist rural women entrepreneurs to expand their business. Minister Datuk…
HONG KONG, March 31 — From smog breaks to pollution bonuses, Asia’s businesses are promising increasingly inventive perks in a desperate bid to lure executives to a region where toxic air engulfs major cities for much of the year. Health…
PETALING JAYA: Analysts believe that Top Glove Corp Bhd will continue to face downward pressure on margins in calendar year 2019 (CY19) as there will be an influx of glove supplies from the top rubber glove producers.
AmInvestment Bank Research said Top Glove plans to increase its capacity by 9.6 billion pieces of gloves per annum in financial year 2019 (FY19) and 10.8 billion pieces in FY20.
“CY19 will see an enlarged supply of gloves by 14%, although the expansion will come at a gradual pace. As this exceeds the organic demand growth expectation of 8%-10%, we believe average selling price (ASP) will be weighed down.
“It will take six to 12 months for demand-supply to reach an equilibrium. Hence, we opine that margins will only normalize by the end of CY19. Our net profit margin estimates are 9.3% in FY19, 9.9% in FY20 and 10.1% in FY21.”
To recap, Top Glove achieved a 27.7% year-on-year increase in revenue in the first half of financial year 2019 (1HFY19) in tandem with higher sales volume growth, while its net profit grew 0.6%.
However, its net profit margin dropped 2.4 percentage point to 8.9% as the group faced higher interest cost and tax expense in 1HFY19.
Hong Leong Investment Bank (HLIB) Research said the management highlighted that much of the pressure on margins came from the natural rubber (NR) segment, contrary to expectations that nitrile would face more ASP pressure.
Moving forward, it expects the NR segment’s ASP to be on an uptrend, but offset by downward ASP pressure from the nitrile segment.
“We adjust our FY19-21 forecast downward by -3.6% as we recalibrate our tax assumptions upward (from 15% to 18%) in line with management guidance.”
HLIB Research maintained its “buy” call on Top Glove but lowered its target price to RM5.31 from RM5.51 previously.
Meanwhile, AmInvestment Bank said it continues to like Top Glove for its expansionary plans, focus and continual efforts in improving quality and operational efficiency as well as its position as the largest rubber glove manufacturer.
“We maintain our ‘buy’ call on Top Glove with an unchanged discounted cash flow-based fair value of RM5.66 per share. At our fair value, Top Glove’s implied FY20 price-to-earning (PE) is 27.7 times.”
BEIJING: China’s manufacturing sector ended its four-month downward trend in March, official data showed today, but exports continued their long slide in the wake of the Washington-Beijing trade war.
The official Purchasing Managers’ Index, a measure of factory activity, rose to 50.5 in March from the previous month’s contraction and three-year low of 49.2.
The growth was likely driven by seasonal factors as factories ramped up production after February’s Lunar New Year holidays.
Some steel mills and coal power plants also increased output as winter smog restrictions end.
Factory output also grew at its fastest pace in six months in March, China’s National Bureau of Statistics reported, but export orders shrank for the 10th straight month amid slowing global growth and as collateral damage in the trade spat with the United States.
Over the last eight months, Washington and Beijing have slapped tariffs on more than US$360 billion (RM1.5 trillion) in two-way goods trade, weighing on the manufacturing sectors in both countries.
US and Chinese negotiators wrapped up trade talks in Beijing on Friday ahead of another round next week, when China’s economic tsar Liu He will head to Washington to continue discussions on a possible deal.
China has announced a raft of stimulus measures to cushion the impact from it’s cooling economy.
Earlier this month, Premier Li Keqiang announced more spending on roads, railways and other big-ticket infrastructure projects, along with tax cuts worth 2 trillion yuan (RM1.21 trillion) to ease pressure on companies and spur employment.
China announced a lower growth target of 6-6.5% this year, down from 6.6% growth in 2018.
PETALING JAYA: The Malaysian Institute of Estate Agents (MIEA) has identified up to 12 proptech companies that it says are illegally operating real estate practices and is in the midst of preparing to lodge police reports.
MIEA CEO Soma Sundram (pix) said since the release of its statement last week, more proptech companies illegally carrying out real estate agency work have been identified, based on information provided by its members.
“We have identified 12 companies that are directly and indirectly involved in real estate transactions. We are concerned as to them infringing on real estate practices. We’re going to make a police report and are now collecting information on these companies, to see how they have contravened Section 22c of the Act,” he told SunBiz.
According to Section 22c of Act 242, all real estate agents and negotiators are required to be registered with the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP) and any individual or firm (aside from property owners) collecting fees from real estate practices are deemed to be in contravention of the law.
‘If they (proptech firms) want to practise real estate, we welcome them. They just have to become a registered firm, then we won’t have an issue because they will follow the law. Any form of illegal estate practice is an issue with law and its practitioners’.
“Some proptech companies may hide it (fee collection) in different ways but as long as money is collected in whatever shape or form, it is considered illegal,” said Soma, adding that such proptech companies have been operating for as long as three to four years.
Last week, MIEA issued a statement voicing concerns over proptech start-ups claiming to provide real estate technology solution and circumventing the law by carrying out real estate practice illegally.
MIEA urged BOVAEP, the regulators of the profession, and the Finance Ministry to take the necessary action against these “proptech brokers” to protect the public and the laws of the country.
It is learnt that a proptech firm received a cease and desist order from the government late last year, but business operations resumed after talks with the government officials.
Speedrent founder Wong Whei Meng opined that such conflicts are unnecessary as real estate agents and proptech firms have the same goals.
“If we provide bad service, then there would be no traction for proptech start-ups. My stand remains the same, that the market decides what they want to use.”
He said Speedrent, a one-stop online rental platform, does not charge any homeowner fees, while homeowners choose whether to buy insurance from the platform only after a tenant has been found for the homeowner.
“Simply put, Speedrent is an insurance sales platform that provides free services to homeowners while assisting homeowners in finding tenants,” Wong said.
He likened the goals of proptech firms with start-ups such as Grab and Airbnb, which is to provide an enhanced customer experience for all via the use of technology.
“With the rapid advancement of technology, everyone should look at re-optimising their services. All industries have the potential to provide a more enhanced user experience. We’re living in a digital age and should innovate to keep up,” Wong said.
He said that the law is out of date and has not been amended for 20 years, and urged the government to revise it as soon as possible.
Established in 2015, Speedrent is a free-to-use automated platform connecting landlords directly with tenants with rental protection.
Meanwhile, PPC International Sdn Bhd managing director Datuk Siders Sittampalam said the emergence of proptech companies has not really affected his business but emphasised the importance of the regulator’s role.
“We are moving towards a digital economy. But there must be regulators, this is to protect clients. That is the objective of the act,” he said.
“The act can be adapted as technology advances but not at the expense of the clients or public. How the act should be adapted would be up to the authorities to decide and it would need to be amended at Parliament.”
He said under existing law, proptech companies should not be allowed to act as agents as they are not regulated by BOVEAP, thus members of the public are not protected if anything untoward happens.
“I would like to stress that those who are not registered with BOVEAP are against the law, against an act of Parliament,” he said.
KUALA LUMPUR, March 31 — PLS Plantation Bhd’s joint venture with Shanghai-based Greenland Group has signed deals with four Chinese fruit distributors to sell its durian products and expand its export business. The four Chinese fruits…
LANGKAWI, March 31 — The Malaysia External Trade Development Corporation (Matrade) is optimistic that the country’s aerospace industry will maintain an upward momentum and register a double-digit growth this year. Chief executive officer Datuk…
BERLIN, March 31 — As the United Kingdom grapples with its Brexit drama, the uncertainty around its decision to leave the EU persuaded Dale Carr to close down her Berlin shop selling British goods. The 67-year-old from Sheffield and her husband…
SAO PAULO, March 31 — Brazilian automaker CAOA has signed a confidentiality agreement to negotiate a potential purchase of Ford Motor Co's plant in the industrial city of Sao Bernardo do Campo, according to a source familiar with the matter. Ford…