malacca

 
 

Fitch unit: Reduced growth outlook for Malaysia, but rural infrastructure to lead development

KUALA LUMPUR, Jan 21 — Fitch Solutions has downgraded its growth outlook for Malaysia following a slew of project suspensions and postponements by the federal government last year. A press release from its unit, Fitch Solutions Macro Research said…


HSBB rollout could bring revenue growth to TNB

PETALING JAYA: The rollout of high-speed broadband (HSBB) packages leveraging on Tenaga Nasional Bhd’s (TNB) fibre optic infrastructure could bring potential revenue growth to TNB via rental of fibre infrastructure.

However, it is uncertain whether TNB is capable of rolling out HSBB in untapped areas that have yet to be connected with existing fibre network, said PublicInvest Research in its report.

“If TNB can only provide services to areas that are already currently served by existing networks, then TNB has little differentiation from incumbent telco players apart from offering products at lower price points. Overall, we believe this could bring potential revenue growth to TNB through rental of the fibre infrastructure but earnings impact is expected to be insignificant to the group,” it said.

TNB’s wholly owned subsidiary City Broadband is among the broadband players in the pilot project but for TNB to compete directly against existing broadband players in a meaningful manner, significant investment would be required for last-mile connectivity.

On Tuesday, Astro, Maxis, Digi, Celcom and City Broadband launched new HSBB packages leveraging on TNB’s fibre optic infrastructure in Jasin, Malacca, where TNB implemented a three-month pilot project through the RM1 billion National Fiberisation and Connectivity Plan initiative announced in Budget 2019.

“Although this is negative to Telekom Malaysia (TM) as it introduces new competition into the fixed line broadband segment, connectivity is only restricted to limited areas covering 1,100 homes in Jasin.

“Impact on the respective players is expected to be immaterial but it remains to be seen whether TNB could also rollout similar arrangement with service providers in other locations throughout the country,” said Public-Invest Research, which maintained its “underweight” call on the sector.

For Astro, it believes that the deal would be value accretive as Astro’s 92% household penetration in Jasin is predominantly NJOI, which does not generate any TV subscription revenue currently. However, it noted that any earnings contribution would not be significant in the near term as it is only a trial project and will depend on the take-up rate by eligible households.

Meanwhile, Affin Hwang Capital has downgraded TM to “sell” from “hold” with an unchanged target price of RM2.30 in view of higher downside risk to its share price after a 13% rally since November 2018.

TNB’s high-speed fibre network should provide an irresistible option for TM’s 1.1 million Streamyx subscribers, given the significant speed upgrades and lower prices. However, competitive product offerings from Maxis and City Broadband may lure TM’s 1.2 million unifi subscribers, it said in its report.


Gagasan Nadi Cergas makes lukewarm debut

PETALING JAYA: Despite rising as much as 33.3% to an intraday high of 40 sen, Gagasan Nadi Cergas Bhd ended its first trading day on the ACE Market of Bursa Malaysia with merely a premium of 0.5 sen or 1.7%.

The stock debuted at a premium of 9 sen to 39 sen at the opening bell, but it pared gains on selling pressure and closed at 30.5 sen on 118.6 million shares changing hands, being the second most actively traded counter.

Gagasan Nadi Cergas managing director Wan Azman Wan Kamal said the group intends to continue its efforts in actively tendering for both public and private sector projects.

“Going forward, we remain positive of the Malaysian construction sector outlook and believe that there are many more projects, such as education institutions, affordable housing and medical centers to be built in the near future.”

“We believe our listing today places us in a good position to support these nation-building initiatives. Additionally, our long-term contracts provide us with a stable foundation of recurring income, as we concurrently endeavour to secure new jobs and deliver ongoing works.”

Gagasan Nadi Cergas’s construction order book includes Rumah Selangorku in Putra Heights and Bukit Raja, 1Malaysia People’s Housing in Pasir Mas, Cardiology Centre for Hospital Serdang and Maktab Rendah Sains Mara in Bagan Datuk.

It also holds long-term contracts, namely a 20-year facility management concession for hostels of International Islamic University Malaysia in Kuantan, Pahang till 2034; a 20-year facility management concession for hostels of Universiti Teknikal Malaysia Melaka in Durian Tunggal, Malacca till 2037; a 20-year operation contract for a District Cooling System (DCS) to supply chilled water to the German-Malaysian Institute, Bangi till 2028 and upcoming 30-year operation contract for a DCS and electricity distribution under the Datum Jelatek development.

Gagasan Nadi Cergas plans to raised RM60 million from its IPO with RM42 million via public issue of new shares and RM18 million from the sale of existing shares.

Some RM14 million will be allocated for funding of the Asean Football Federation mixed development; RM6.5 million for capital expenditure of DCS under the Datum Jelatek development; and RM16.5 million for working capital.


Jaycorp reports fire incident at Malacca plant

PETALING JAYA: A fire broke out at JayCorp Bhd’s factory in Malacca yesterday morning.

“The assets damaged include a finishing line, part of the factory roof, some spray guns, fire extinguishers and sprinklers. While further work needs to be carried out to ascertain the exact value of damages sustained, we roughly estimate that the total value of damage to these assets is in the region of RM500,000 to RM900,000,” it told the stock exchange.

In addition, Jaycorp said some work in progress (WIP) was also damaged.

“We roughly estimate that the damage caused to WIP is below RM100,000. In total, we do not expect the combined value of damages sustained by the fire incident to exceed RM1 million. All assets and WIP are adequately insured.”

The affected factory, owned by Jaycorp Trading Sdn Bhd, is located in Sungai Rambai and. It is currently being rented out to Yeo Aik Wood Sdn Bhd.

Both Jaycorp Trading and Yeo Aik Wood are wholly owned subsidiaries of Jaycorp group.

The area damaged by the fire was restricted to a single finishing line within the factory with minimal impact to other areas of the factory.

The fire started at around 8.40 am on December 23 and was extinguished within 30 minutes.

“No major injuries were sustained. We have not yet determined the exact cause of the fire but we are in the process of carrying out the necessary investigations. A police report was made on the same day.”

Jaycorp said it does not expect any major impact to its operations as it has another finishing line facility.

“As such, although there may be some minor production delays in the immediate short term due to the damage caused by the fire incident, we expect to fully recover from this within two weeks.”


Muhibbah Engineering wins two contracts worth RM205m

PETALING JAYA: Muhibbah Engineering (M) Bhd has bagged two engineering, procurement, construction, installation and commissioning (EPCIC) contracts for a combined value of RM205 million.

The first contract is a EPCIC of seawater overboard upgrading, firewater network improvement and new pressure control (PCV) installation project in Malacca from Regas Terminal (Sg Udang) Sdn Bhd, which is a wholly owned subsidiary of Petronas Gas Bhd. The job is scheduled for completion in the first quarter of 2020.

The second project, which is slated for completion in the second quarter of 2020, is a EPCIC job for the Yetagun Acid Gas Removal Unit project in Myanmar.

This project was awarded to the group by PC Myanmar (Hong Kong) Ltd, which is a wholly owned subsidiary of Petroliam National Berhad (Petronas).

“The contracts are expected to contribute positively to the earnings and net assets of the Muhibbah Group for the current and future financial years,” it said.

The stock was up 0.74% to RM2.72 with 225,300 shares done.


Encorp’s JV with Sinmah Capital for Bukit Katil project falls through

PETALING JAYA: Encorp Bhd’s plans to develop its Bukit Katil land in Malacca has hit another setback as plans to jointly develop the land with Sinmah Capital Bhd fell through.

In a filing with Bursa Malaysia, Encorp said the conditions precedent (CP) of the joint venture and shareholders agreement (JVSA) dated June 8, 2017 for the proposed joint venture were not fulfilled as of Dec 6, 2018.

The JVSA was entered into between Encorp Bukit Katil Sdn Bhd (EBKSB), Sinmah Development Sdn Bhd (SDSB) and Sinmah Development JV Sdn Bhd (SDJSB) in June last year.

“The CP period for the JVSA has lapsed and has not been extended by EBKSB and SDSB. As such, the JVSA has been rescinded and the parties shall revert to its original position prior to the JVSA,” said Encorp.

The expiry of the JVSA is not expected to have any financial effect on the earnings per share and net assets per share of Encorp.

Under the JVSA, the parties were to jointly develop 77.9 acres of the land into a mixed development comprising a medical college, hospital and residential properties with a gross development value of RM865 million.

SDSB is a wholly-owned unit of Sinmah Capital while SDJSB is a JV company set up to carry out the development project. EBKSB and SDSB held 70% and 30% stake respectively in SDJSB.

To recap, EBKSB had in October 2016 signed three memorandums of understanding (MoUs) with Kean Leng Construction Sdn Bhd, Tiong Nam Logistics Holdings Bhd’s unit Tiong Nam Properties Sdn Bhd and SDSB, to develop 640.9 acres of leasehold land in Bukit Katil.

However, in July last year, the MoU with Kean Leng Construction lapsed and the parties had mutually and amicably agreed not to further extend the validity period of the MoU. A month later, the MoU with Tiong Nam Properties lapsed, with no conclusion reached on the negotiations between the parties.

The MoU with Kean Leng Construction was to develop 49 acres while the MoU with Tiong Nam Properties was to develop 100 acres.

EBKSB is the master developer of the land, which belongs to Federal Land Development Authority (Felda). Felda holds about 67% stake in Encorp via Felda Investment Corp.

Encorp’s share price fell 2.22% or 1 sen to close at 44 sen today with 31,000 shares traded.


Thailand’s Chana can reduce Penang Port’s cargo shipment: Trade council

BUTTERWORTH: Cargo shipment from Thailand to Penang Port is expected to drop by 15% once Chana in southern Thailand transformed into a deep-sea port.

Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) joint business council chairperson Datuk Faudzi Naim Noh said Southeast Asia’s reliance on Penang Port would be considerably reduced.

It is easier to export goods to China from Chana instead of Penang Port as the ships need not circumnavigate the Straits of Malacca, he said.

The shops would just need to sail the South China Sea to reach China as Chana is located at the tip of the Gulf of Siam.

Chana, in the Songkhla province, has boomed after the decision of the Joint Malaysia-Thailand Development Authority to build the natural gas pipeline there.

“Penang Port may need to seek alternative markets for the transhipment of cargo to counter the losses,” Faudzi said at the digitalisation of the intermodal logistics conference at the Light Hotel here today.

He said stakeholders in the logistic sector from prime movers to freight forwarders, Penang Port and KTM Rail need to improve their competitive standard in the age of globalisation.

Faudzi said despite the emergence of Chana as an alternative port to Penang Port, the state could remain a hub for the logistic movement in the IMT-GT region.

Penang has excellent airport, KTM rail, roads and seafaring connectivity, coupled with its increased of affluence from the growth of manufacturing and services sector, he added.

IMT–GT has grown since its inception in 1993 to a membership of 32 states as well as provinces in Malaysia, southern Thai and Sumatra.


Penang Port may lose 20pc of cargo traffic volume

BUTTERWORTH, Dec 6 — The Penang Port may be at risk of losing 20 per cent of its cargo traffic volume unless its logistics’ efficiency improves, said Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) Joint Business Council (JBC) Malaysia…


ReGen Rehabilitation targets at least one hospital in each major state in Malaysia

PETALING JAYA: ReGen Rehabilitation International Sdn Bhd, which recently launched its ReGen Rehabilitation Hospital in Petaling Jaya, Selangor, aims to open at least one hospital in each major state in Malaysia.

“Here in Petaling Jaya, we want to make it a centre of excellence and we target to open at least one hospital each in the main states like Johor, Malacca, Sabah and Sarawak, and the northern region,“ its CEO Sue Lee (pix) told SunBiz.

The hospital, which is the first private rehabilitation hospital in Malaysia, is a 60:40 joint venture between Khazanah Nasional Bhd and US-based rehabilitation provider, Select Medical Holdings Corp.

“Our vision is to be the premier rehab provider of medicine in this country, in Asean, in the development of specialised world class rehab hospital, outpatient facilities and staffed by the best trained health professionals in the country,“ Lee said.

According to her, the importance of rehabilitation is currently very low in Malaysia and, more often than not, doctors and therapists do not communicate, and they work independently of one another.

She said ReGen practises an integrated patient care model whereby rehab specialists work together with a team of rehab nurses, physiotherapists, speech therapists, occupational therapists, a rehab case manager or care coordinator to care for its patients, based on programmes designed for each patient’s specific needs.

“Our mission is to provide world class rehab care to patients who suffer from debilitating injury or illness, so that they can regain as much physical and cognitive function, and have the best chance to return home and lead an independent and high quality life,“ she added.

In Malaysia, Lee said, most hospitals do provide acute rehab. However, rehabilitation programmes in private acute hospitals are frequently managed by a physician and the programmes are fragmented as each individual caregiver has his or her own goals while communication between the caregivers is not in sync as there are many other tasks to focus on within the hospital.

In terms of cost, she said it is much lower as overhead for the hospital is also lower, by some 20%, as the hospital is purely focused on rehabilitation while acute hospitals have higher overhead due to the many services provided and equipment required.

Lee said Khazanah approached Select Medical after a “beauty pageant” globally and the company was formed in October 2015. The company spent about two years to plan and design the 96-bedded hospital.

At the same time, it began offering its rehabilitation services at Beacon Hospital in Petaling Jaya in February last year, where it rented a 10-bedded ward, in order to train its team of nurses and caregivers before the opening of ReGen Rehabilitation Hospital.

“We hope to expand throughout Malaysia, throughout Asean and throughout Asia. We do have patients from overseas, they Googled and found us. We have patients from the Middle East, Pakistan and Indonesia,“ Lee said.

“The potential is large for this service. There are so many people living longer, there are chronic illnesses and a lot of people living independently; their children don’t live with them. In Malaysia, the third highest cause of death is stroke. So there is an untapped market, untapped needs in this country, unmet needs,“ she added.


QSR teams up with KIP for drive-thru KFC outlets

KUALA LUMPUR: QSR Brands (M) Holdings Bhd, which has inked two agreements with Kepong Industrial Park (KIP) Group to develop new KFC drive-thru restaurants, plans to open a minimum of 67 new KFC outlets and another 60 Pizza Hut outlets nationwide over the next three years.

Speaking at the memorandum of understandings (MoUs) signing ceremony yesterday, QSR Brands managing director Datuk Seri Mohamed Azahari Mohamed Kamil said the group also planned to upgrade close to 20% of its stores for a fresh new look.

The group has over 810 KFC and 460 Pizza Hut outlets across Malaysia, Singapore, Cambodia and Brunei.

Moving forward, Mohamed Azahari said the group intends to continue collaborating with the renowned developer to keep the momentum of its restaurant growth across its retail centres going, adding it is now in talks with seven property developers.

Under the MoUs, the parties will jointly develop two new KFC drive-thru restaurants at KIP Group’s retail outlets, namely KIP Mall Desa Coalfields in Sungai Buloh and KIP Mart Lavendar in Senawang.

KIP Group’s CEO Valerie Ong said the partnership is expected to boost KIP Real Estate Investment Trust’s (KIP Reit) occupancy rate and footfall to 1,500 visitors per day once it opens its doors to the public in December next year.

She said with the extension of the new KFC drive-thru restaurant, the group’s KIP Mart Lavendar is expected to increase its occupancy rate by 4% to about 85%.

“The addition of KFC restaurants to the present tenant mix will increase our array of food and beverage outlets that will inevitably take both QSR Brands as well as KIP Group to the next level. We look forward to more successful collaborations in the near future,” Ong added.

To recap, QSR Brands and KIP Reit formed its first strategic collaboration last month via a tenancy agreement to establish a KFC restaurant at KIP Mart in Kota Tinggi, Johor.

KIP Reit, which has total assets under management of RM614.9 million as at Sep 30, 2018, is expected to surpass the RM1 billion mark by 2019.

KIP Reit’s portfolio consists of five KIP Marts properties located at Masai, Tampoi, Kota Tinggi, Senawang and Malacca as well as a retail mall in Bangi known as KIP Mall.

Asked to update on the group’s RM2 billion initial public offering (IPO) plans slated by this month, Mohamed Azahari said “work is in progress”.

According to a draft prospectus submitted to the Securities Commission Malaysia, QSR Brands is offering a total of 1.465 billion shares for sale in its IPO, which includes a public issue of 70 million new shares.

Proceeds from the IPO will mainly be used for the expansion of KFC and Pizza Hut businesses across the country within 12 months.