Daily- Proton

Proton Holdings Bhd, the holding company of Lotus Group, has signed a joint venture
agreement with Lotus Group International Ltd, UK and Goldstar Heavy Industrial Co Ltd for a
possible business expansion of Lotus cars in China. The collaboration seeks to accelerate the
development of Lotus cars in the premium sports segment in China, leveraging on the
incentives offered by the Fujian provincial government. (StarBiz)

Taliworks Corp Bhd won a kind of victory in the three-year dispute related to its waste
water treatment project in Ningxia Province, China, as its subsidiary was hit with a lower
penalty amount. It told Bursa Malaysia that the China International Economic and Trade
Arbitration Commission’s (CIETAC) Shanghai sub-commission had ordered its subsidiary,
Ningxia Eco Wastewater Treatment Co Ltd, to pay 4.37mn yuan (RM2.55mn) in penalty to
Hua Sheng Construction Group Co Ltd. (StarBiz)

OSK Property Holdings Bhd is setting aside RM100mn as capital expenditure for land
acquisition this year. Its managing director and CEO Tan Sri Ong Leong Huat said on Friday
the group targets to maintain RM1bil of gross development value in property launches this
year. About 20% to 30% of this would be from the ongoing Sungai Petani development in
Kedah, he added. (StarBiz)

Daily- Malaoff

Malakoff Corporation Bhd plans to raise about RM1.80bn from the issuance of one billion
new shares at a tentative retail price of RM1.80 a share under its relisting exercise. It plans
to use the RM1.80bn proceeds to fully redeem its junior Sukuk Musharakah which bears a
profit rate of 6.3% per annum until September, and a profit rate of 9.3% thereafter. (StarBiz)

Maxis Bhd's prepaid unit, Hotlink, has partnered with key online game publishers to launch
Game Credits Top-Up facility in Malaysia via Hotlink Top-Up Tickets. In a statement, Maxis
said Hotlink customers would get additional benefits including in-game items for League of
Legends, EA FIFA ONLINE 3, Blackshot and additional currency for IAH Games. Maxis' Head
of Prepaid, Consumer Business, Navin Manian, said with the introduction of Game Credits,
the company would enable avid Malaysian gamers to have easier access to this social
phenomenon. (Bernama)

Mitrajaya Holdings Berhad plans to launch four developments with a combined gross
development value of RM2.47bn between now and 2017. Mitrajay managing director Tan
Eng Piow says the group is keen to monetize its land assets in the coming years. (The Edge
Weekly)

Goods and services tax- GST in Malaysia (Worth to have a quick look!!)

Pre GST:
Pre-GST spending rush, but not on “big-ticket” items. Mainly on “Department & General Stores”, “Electronics & Telecommunications Equipment”, “Jewelries, Watches & Cameras”, “Furniture & Furnishings”, “Apparels” and “Automotive” (e.g. car maintenance services; purchases of parts and accessories), not so much on “big ticket” items like passenger cars and properties.

Passenger car sales growth was +2.7% YoY in Feb 2015.Residential property loan growth in Feb 2015 was relatively unchanged at 13% YoY compared with 12.9% YoY in Jan 2015. In addition, the volume of property transactions in 1Q 2015 declined -4.6% YoY to 88,600 from 92,900 in 1Q 2014 and -6.2% QoQ from 94,500 in 4Q 2014.

In addition, indications are that the value of credit card spending surged further in Mar 2015 to 30%-35%. Malaysia's GDP and inflation rate forecasts of 4.5% and 3%-4% respectively. The pre-GST spending rush implies 1Q 2015 real GDP growth north of +5% YoY.

Post GST:
Mixed impact on prices of goods and services. This is due to the GST replaced Sales Tax and the Services Tax and it has standardrated, zero-rated and exempted items. In addition, there are promotions by some businesses & industries to mitigate the impact.

1. Lower car prices by up to -5% (simple average of -1%).

2. Higher prices of especially processed food and beverages, some of which rose by more than the 6% GST.

3. Some businesses/industries are absorbing GST to mitigate the impact namely in hypermarket operators, food and retail chains, and number forecasting operators (NFOs).

4. Public transport exempted from GST but fares are rising, beginning with taxis, with more coming. On 19 Mar 2015, the Land Public Transport Commission (SPAD) announced 20%-67% hikes in taxi fares for Klang Valley, Johor Bahru and Penang, citing rising operating costs as the main reason.

5. Fuel prices were raised on 1 Mar 2015 to MYR2.25/litre for RON97 and MYR1.95/litre for RON95 and diesel as crude oil prices rebounded.

There are also the post-GST issues causing uncertainties on prices e.g. “flipflopping” on the prices of telco’s (eg. Maxis, Digi, Celcom, U)prepaid reloads; “legality” of the 10% service charge at hotels & restaurants; prospect of more medicines and medical equipment as well as specialist fees being exempted from GST.

GST in other countries:-

 Peers Analysis: Developed Countries vs Developing Countries:-

Daily

Bioalpha Holdings Bhd, which officially commenced trading on the Ace market of
Bursa Malaysia today, is all set to penetrate the Middle East by mid-2015. Managing
Director Hon Tian Kok said the health supplements company had last year, signed a
memorandum of understanding with Fatima Group of the United Arab Emirates (UAE).
Fatima Group, with over 20 hypermarkets throughout the UAE, will act as the
distributor of Bioalpha's products in the country. (StarBiz)

Hunza Properties Bhd said a suit brought against it by Loke Wan Yat Realty Sdn Bhd
(Loke Realty) would not have any material operational, financial or loss impact on it. It
had received a writ and statement of claim, both dated March 18, from Loke Realty’s
solicitors on April 13. Hunza said Loke Realty had outlined a series of claims and relief
from HPG, in a suit filed in Penang High Court on March 29. (Financial Daily)

Tenaga Nasional Bhd (TNB) announced that its new coal-fired power plant in
Manjung, Perak has begun commercial operations from midnight of April 13 and will
transmit an additional 1,000MW into the national grid. The plant was commissioned
just five hours after receiving the Commissioning Test Certificate from the Energy
Commission at 7pm on April 13. (Financial Daily)

Daily

Bumi Armada Bhd has won contracts worth US$300mn (RM1.1bn) from ElectroGas
Malta Ltd for the conversion, supply and operations and maintenance of a floating
storage unit. The contracts, awarded to its units Armada Floating Gas Storage Malta Ltd
and Armada Floating Gas Services Malta Ltd, were for a firm period of 18 years and two
months. (StarBiz)

Cahya Mata Sarawak Bhd, through unit CMS Works Sdn Bhd’s subsidiary PPES Works
(Sarawak) Sdn Bhd, has won the contract to build the proposed Sarawak Museum
Campus and Heritage Trail, Kuching, for RM308mn. The project, to be completed by the
first quarter of 2020, also includes a heritage trail in central Kuching as well as the
period conservation and exhibitory for the three existing historical museum buildings
and of a pavilion. (StarBiz)

Boustead Holdings Bhd is injecting RM199mn cash for a 50% stake in Irat Properties
Sdn Bhd, which in turn is taking control of two companies involved in the automated
enforcement system. Boustead said on Tuesday it was buying 93.33mn Irat shares –
comprising of 60mn new Irat shares for RM128mn cash and an additional 33.33mn new
Irat shares at RM2.13 each for RM71mn. The remaining 50% equity interest in Irat is
held by existing shareholders, LTAT and Irat Holdings Sdn Bhd. (StarBiz)

Lay Hong Bhd, which last month decided to halve the size of its planned private
placement following a major shareholder’s protest, can only place out the shares to
institutional investors. The company said on Tuesday that Bursa Securities imposed
that as one of the conditions for approving the exercise. The securities exchange
operator also requires the submission of the identified placees for its clearance.
(StarBiz)

Berjaya Corp Bhd (BCorp) has proposed to dispose of its entire stake in its whollyowned
indirect subsidiaries Berjaya Bandartex Sdn Bhd (BBandartex) and Berjaya
Knitex Sdn Bhd (BKnitex), together with a piece of land in Johor for RM30mn.

Weekend- Overseas Update

Japan banks outmuscle Chinese peers on growth abroad, IMF says
Japanese banks have been more aggressive than their Chinese peers in expanding abroad, on a larger scale and diversified their businesses, making them less vulnerable to funding issues since the global financial crisis, the IMF said in its Global Financial Stability Report that also highlighted differences in their approaches. Banks in both countries have used their strong balance sheets to seize growth opportunities overseas.

Saudi Arabia sees crude price rising as it boosts production
Saudi Arabia increased oil production in March to the highest in at least 12 years and expects crude prices to rise in the “near future,” according to oil minister Ali al-Naimi. The kingdom, which led the OPEC last year in refusing to cut output, produced 10.3m barrels a day last month and will keep pumping for now at around 10m, al-Naimi said.


Oil slumps most in 2 months as supply gain adds to record glut
Oil posted its biggest one-day slump in two months after US crude inventories jumped the most in 14 years. Brent for May settlement fell US$3.55 (6%) to US$55.55 a barrel.US stocks advance as Fed minutes show split views on rates

German factory orders drop for second month
German factory orders unexpectedly fell for a second month in February in a sign Europe’s largest economy is still prone to risks. Orders, adjusted for seasonal swings and inflation, fell 0.9% mom in February (a revised -2.6% in January), data from the Economy Ministry showed. The median estimate in a Bloomberg survey called for a 1.5% increase. Orders slid 1.3% yoy.

Malaysia Daily

 UEM Sunrise unveils plans

UEM Sunrise has unveiled its comprehensive development plans for the second phase of Gerbang Nusajaya, attracting international investors into its commercial and business development. 1,841.72ha of the entire development were designed for growth via catalytic developments and strategic partnerships with established developers and multinational companies. (Source: Star Biz)

MATTA wants Customs to revisit software vendors

The Customs Department has been urged to revisit software vendors and human resource departments to ensure that they are well versed with the GST rules. Many of these approved software vendors seemed to have limited knowledge of the rules and were short of personnel to provide proper training for those who adopted the programs. (Source: Star Biz)

Pestech gets RM1.59bn concession in Cambodia

Power system engineering and technical solutions provider Pestech has become a concession owner in Cambodia after it secures a project worth RM1.59bn. It had signed an agreement with Cambodia’s Mines and Energy Ministry and state-owned Electricite Du Cambodge (EDC) to transfer the ownership of the 230kV Kampong Cham – Kratie Transmission System project to its 60%-owned Diamond Power. The build-operate-transfer project to bring electricity from the upcoming Hydro Power Lower Se San 2 hydropower plant in Stung Treng to Kratie is for a 25-year period. (Source: Star Biz)

EPF outsources RM86bn to external fund managers

Funds outsourced by the EPF to external fund managers rose 19% to RM86bn last year from RM72bn in 2013 as part of its diversification strategy. The outsourced funds were invested in both equity and fixed income instruments, representing approximately 14% of EPF total investment assets. EPF objective of achieving a real return of 2% dividend over a 3-year rolling period. (Source: Star Biz)

TNB now in control of 90.2% of Integrax

TNB has received acceptances for its general offer of Integrax shares, giving it a total of 90.2% holding in the latter. Tenaga also said that it did not intend to maintain the listing status of Integrax and would take the necessary steps to withdraw its listing in accordance with Bursa Malaysia’s listing rules. Meanwhile, Integrax had been informed that Tenaga would seek to compulsorily acquire the remaining shares it did not own once it received acceptances totalling 9/10 of the total shares it was seeking to buy though the general offer. (Source: Star Biz)

CBIP awarded RM50m contract by United Plantation

CB Industrial (CBIP) has been awarded an RM49.8m contract from United Plantations to design a palm oil mill at Ulu Bernam. CBIP’s unit – Modipalm Engineering SB – had received the LOA to design, supply, fabricate, deliver to site, erect, test, commission and guarantee performance for construction of a 60-tonne fresh fruit bunch per hour palm oil mill at Ulu Bernam. The letter of award is expected to contribute positively to the earnings of the CBIP group for the financial years ending Dec 31, 2015 and 2016. (Source: Star Biz)

Sarawak Cable unit gets RM27m job

A JV between a Sarawak Cable unit & PTIS Engineering SB has been awarded a RM26.89m contract. The unit, Trenergy Infrastructure had received the LOA from TNB for the setting up of the 275KV AIS Tanjung Langsat Industrial Estate switching station in Johor. The contract commenced yesterday. SCB expects the contract to contribute positively to the group’s earnings and net assets for the FYE2015. (Source: Star Biz)

Gadang to buy Semenyih land for RM96m

Gadang has proposed to acquire a 62.84-acre parcel of freehold land in Semenyih, Ulu Langat from Sementar Properties Sdn Bhd for RM95.8m in cash. In a circular to shareholders that its indirect unit Crimson Villa SB entered into a SPA with Sementar to acquire the land on Jan 30. It issued the circular to seek approval from its shareholders as well as provide the relevant information on the acquisition. The company will hold an EGM on April 23 to obtain approval for the acquisition. (Source: Star Biz)

Sime aborts JV with VTTI Asia

Sime Darby has announced that it will not be pursuing a JV with VTTI Asia to explore opportunities at Weifang Sime Darby Port in China. Sime Darby’s indirect subsidiary - Weifang Sime Darby Port - had entered into MoU with VTTI on Oct 25, 2013 to explore possibilities of jointly developing, owning and operating the bulk liquid storage terminal at Weifang Sime Darby Port. It had earlier said the MoU did not constitute any legal binding obligations between the parties until definitive and binding agreements were executed. (Source: Star Biz)

Boardroom changes at Masterskill

Masterskill (MEGB), which recently gained a new major shareholder, has announced several boardroom appointments. The company had appointed Gen (rtd) Tan Sri Mohd Shahrom Nordin as chairman, while former chairman and executive director Siva Kumar M. Jeyapalan had been redesignated as director. Shahrom is currently chairman of construction firm TRC Synergy and executive director (defence & business) at National Aerospace & Defence Industries (NADI) SB. (Source: Star Biz)

Takaso says in talks on joint ventures, possible acquisition

Takaso Resources Bhd is in the midst of discussions on several possible joint-venture projects and the possible acquisition of a company, all of which have not been finalised, it told Bursa Malaysia in a response to an unusual market activity (UMA) query yesterday. (Source: Star Biz) 

Malaysia Daily Update

IJM Land Bhd and Sime Darby Property Bhd have signed up as the new Malaysian consortium partners in developing the Malaysia-China Kuantan Industrial Park (MCKIP). International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the participation of IJM Land and Sime Darby marked a significant milestone as both companies had strong credentials as master developers and were well-established names, locally and internationally. (StarBiz)

Dialog Group Bhd's shareholders had approved the company's plan to raise funds for investments in two projects with a collective value of RM9bn in Pengerang, Johor. Dialog owns a 25% stake each in the proposed RM6.3bn Pengerang Terminal phase two and RM2.7bn Pengerang liquified natural gas (LNG) projects. (TheEdge)

Protasco Bhd has bagged a RM58mn contract for main civil and infrastructure works to connect the road between Jalan Klang Lama and the New Pantai Expressway (NPE). The project was awarded by Malaysian Resources Corp Bhd's unit Gelanggang Harapan Construction Sdn Bhd. (TheEdge)

Iskandar Waterfront City Bhd said it is disposing of three contiguous pieces of freehold land in Plentong, Johor, which collectively measures some 127.92 acres (51.77ha), for RM2.37bn or approximately RM426 per sq ft. Upon completion of the proposed land disposal, Iskandar Waterfront expects to recognise a gain of approximately RM1.2bn (after taxation) or approximately RM1.80 sen per share. (TheEdge)

Cocoaland Holdings Bhd today confirmed a report that it is in discussions with Swedish private equity group EQT Partners for potential investments in the confectionery manufacturer. The group's board of directors said that its major shareholder Leverage Success Sdn Bhd is in preliminary discussions with EQT for various investment possibilities in Cocoaland. (TheEdge)

Malaysia Daily Update

Four major telcos have agreed to maintain the old rate of prepaid reload pricing which is expected to take effect within a month, said Deputy Finance Minister Datuk Ahmad Maslan. The four major telecommunications companies in Malaysia are DiGi, Celcom, Maxis and UMobile. (BusinessTimes)

UEM Sunrise Bhd has proposed an issuance and allotment of 524.39mn shares, the equivalent of an 11.6% stake in the existing issued and paid up share capital of the company, to its major shareholder UEM Group Bhd, to raise RM770.9mn to maintain its stake in subsidiary Bandar Nusajaya Development Sdn Bhd. UEM Sunrise said the new shares will be issued at RM1.47 and that it has entered into a share subscription agreement today with UEM Group to affect the proposed issuance and allotment, which will see UEM Group's stake in UEM Sunrise rise to 69.6% from 66.1%. (TheEdge)

Astral Asia Bhd has proposed to undertake a capital reduction which will give rise to a credit of RM96mn to offset its accumulated losses, with the balance to be transferred to its capital reserve account. Astral Asia said the proposed par value reduction entails cancelling 80 sen off the par value of every existing share of the company from RM1 to 20 sen. (TheEdge)

Yokohama Industries Bhd, whose controlling shareholder HSG Investments Pte Ltd is disposing of its entire 62.3% stake in the automobile battery manufacturer to another Singapore-based counterpart, Fordington Pte Ltd, for RM90mn, has announced the

resignation of its chief executive officer Dr Patrick Yong Mian Thong, citing personal reason. Yong was appointed to his current post on Jan 1, 2010. Prior to that, he was the chief operating officer of the company since July 2008. (TheEdge)

Cahya Mata Sarawak Bhd (CMS) is buying a 50% stake in Sarawak-state controlled telecommunications infrastructure arm, Sacofa Sdn Bhd, for RM186.8mn in cash. Sacofa currently enjoys a monopoly in the state in providing telecommunication towers to telcos players, which include Celcom, DiGi and Maxis. CMS told Bursa Malaysia on Thursday that it had signed a conditional agreement to acquire 42.4mn RM1 shares at RM4.40 apiece from the State Financial Secretary (SFS), which currently owns a 70.51% interest in Sacofa.(StarBiz)

GD Express Carrier Bhd executive director and chief operating officer Wong Eng Su has resigned from his position in the company on April 1, 2015. In a press release on Thursday, the company said managing director and group chief executive officer Teong Teck Lean will take over into the executive role. Lean, who is also a major shareholder of GD Express Carrier would oversee the group’s operations together with his current senior management team. (StarBiz)

GW Plastics Holdings Bhd has completed its book-building process and it has fixed the offer price at RM1.28 a share under the reverse takeover by property-based MCT Consortium Bhd. GW Plastics acquired the entire 100% of property-based MCT Consortium Bhd from the vendors Tan Sri Goh Ming Choon and Datuk Seri Tong Seech Wi for RM1.2bn cash consideration. The issue/offer price for the offering securities under the regularization plan is priced at RM1.28 per new share, and the gross proceeds expected to be raised by the company and vendors are RM384mn and RM195mn respectively. (StarBiz)

Star Publications (M) Bhd is acquiring the entire stake in a dormant company which will soon own US exhibition assets to diversify its income source. In a Bursa Malaysia filing today, Star said its 64.1%-owned Singapore-listed unit Cityneon Holdings Ltd is acquiring Singapore-based Victory Hill Exhibitions Pte Ltd (VHE) from Philadelphia Investments Pte Ltd for S$21mn (RM56.77mn). Under the sale and purchase agreement between Cityneon and Philadelphia Investments, Cityneon has proposed to undertake a rights issue to partly fund the acquisition of VHE. VHE is a dormant company but by or upon the completion date of the acquisition, VHE will own and operate the assets of US-based Victory Hill Exhibitions LLC. (Financial Daily)

Malaysia Daily Update

Protasco wins RM58m job

Protasco has been awarded a project worth RM58m for main civil and infrastructure works to connect the road between Jalan Klang Lama and New Pantai Express Way (NPE). The project was awarded by Gelanggang Harapan Construction SB, a subsidiary of MRCB. (Source: Star Biz)

Bintulu Port gets nod for extension of concession

Bintulu Port has obtained approval in-principle from the Federal Government to extend the concession period for the operation of the Bintulu Port to 2052. Detailed terms and conditions for the extension of the concession agreement for Bintulu Port SB (BPSS) are subject to the concurrence of all parties concerned. BPSS was licensed as the operator of the Bintulu Port when it was privatised in 1993. Reputed to be one of South-East Asia’s most efficient and profitable ports, Bintulu Port has grown by leaps and bounds over the past 3 decades, with its total cargo throughput soaring to 45.4m tonnes last year from less than 5 million tonnes in 1983 when it started operations. (Source: Star Biz)

IJM, Sime join as partners in Malaysia-China Kuantan Industrial Park

IJM Land and Sime Darby Property have signed up as the new Malaysian consortium partners in developing the Malaysia-China Kuantan Industrial Park (MCKIP). The participation of IJM Land and Sime Darby marked a significant milestone as both companies had strong credentials as master developers and were well-established names, locally and internationally. “Malaysia-China Kuantan Industrial Park SB (MCKIPSB) is a 51:49 JV between the Malaysian consortium and Chinese consortium. IJM Land holds a 40% equity interest in the Malaysian consortium, while Kuantan Pahang Holding SB together with Sime Darby holds 30% and the remaining 30% is held by the Pahang state government. (Source: Star Biz)

Parkson’s profit warning

The profit warning from retailer Parkson’s subsidiary in Hong Kong earlier this week gives rise to the question as to whether the company should have been prudent in declaring its results in previous years. The profit warning came about after a legal suit that was initiated in 2012 between Parkson Retail Group Ltd (PRGL) and the landlord of its plaza in Beijing where it had operations. The dispute surrounds the landlord wanting back a portion of the plaza where PRGL was the tenant. The landlord filed for arbitration in 2012 and finally, on Monday, PRGL was ordered to pay about ¥140m (RM83.82m) to its landlord in Beijing. (Source: Star Biz)

Barakah bags Sabah contract

Barakah Offshore Petroleum announced that its wholly-owned subsidiary, PBJV Group SB (PBJV, has received a Letter of Award from Kebabangan Petroleum Operating Company SB (KPOC) for the provision of topside maintenance services in Sabah. The duration of the contract was for one year effective April 2, 2015 with an option for a further 1 year extension. The mobilisation date for the work is expected to be on May 1, 2015. The total value of the contract would depend on the actual work orders to be issued by KPOC from time to time during the contract period. (Source: Star Biz)

Malaysia Daily Update

Protasco secures RM77m job to maintain roads in Sarawak

Protasco Bhd’s unit has bagged a RM77m contract to maintain the federal roads in Sarawak. Its unit HCM Engineering SB was awarded the contract by the Public Works Department. The contracts included the construction of four overtaking lanes in Sibu and Bintulu divisions. The project was expected to be completed by April next year. It expects the contract to contribute to its financial year ending Dec 31, 2015. (Source: Star Biz)

Faber’s hospital support contract is worth over RM3bn

The hospital support services (HSS) contract recently clinched by Faber Group unit, Faber Medi-Serve SB (FMS), is worth more than RM3bn. The value of the 10-year HSS agreement was RM307.32m per annum. FMS sealed this new concession for the provision of support services to government hospitals in Perak, Penang, Kedah and Perlis on March 11. On the same date, Faber's 40%-owned associate companies, Sedafiat and One Medicare, also signed concession agreements with the Government to provide HSS in Sabah and Sarawak. The value of these contracts was not disclosed in Thursday’s announcement. (Source: Star Biz)

Cahya Mata Sarawak buys 50% of Sacofa for RM186m

Cahya Mata Sarawak Bhd (CMS) is buying a 50% stake in Sarawak-state controlled telecommunications infrastructure arm, Sacofa SB, for RM186.8m in cash. Sacofa currently enjoys a monopoly in the state in providing telecommunication towers to telcos players, which include Celcom, DiGi and Maxis. It had signed a conditional agreement to acquire 42.4m RM1 shares at RM4.40 a piece from the State Financial Secretary (SFS), which currently owns a 70.51% interest in Sacofa. In March 2002, Sacofa was granted a 20-year exclusive right to build, manage, lease and maintain telecommunication towers in Sarawak. It was also given the “deemed native status” allowing it to acquire native lands in the state for construction of telecommunication facilities. (Source: Star Biz)

Telcos to cut broadband rates by more than 6%

Telecommunciations companies have agreed to reduce their broadband rates and the details of the reduction will be announced this month. The drop in broadband prices would be more than 6%. This reduction would help cushion the impact of the 6% imposed under the GST. (Source: Star Biz)

Wong leaves GD Express

GD Express Carrier Bhd executive director and chief operating officer Wong Eng Su has resigned from his position in the company on April 1, 2015. Managing director and group chief executive officer Teong Teck Lean will take over into the executive role. Lean, who is also a major shareholder of GD Express Carrier would oversee the group’s operations together with his current senior management team. (Source: Star Biz)

TNB Janamanjung power station receives BCM certification

TNB Janamanjung is the first power station in Malaysia to receive the Business Continuity Management ISO 22301:2012 certification. The certification, recognised by the Malaysia Book of Records, is an extension to the Publicly Available Specification for Asset Management (PAS 55-1: 2008) received in 2013. The certification is the result of more organised, effective and systematic practices in respect of risk management, business impact analysis, efficiency in preparations for reviving of operations and reduction in interruption impact on operations. (Source: Bernama)

Weekend Special (2)- Estee Lauder, US

Confidence in sustainable top tier sales growth remains high On the topic of sales the focus of discussion was concentrated on key areas of uncertainty:

On China, while EL’s non-China EM growth has been impressive at roughly 30% in aggregate last quarter, management acknowledges that dynamics within this important market have been more challenging. Growth slowed late last-year, but reaccelerated in 2Q15 (retail sales climbed to +15%). While growth may remain choppy from one quarter to the next, management believes it has made adjustments that will enable sustained improvement. Management said its flagship Estee Lauder brand has begun to more aggressively pivot to the on-line channel as department stores lag and toward the make-up segment as they believe Chinese consumers are rapidly gaining interest in make-up – a segment where EL has an advantage as the global leader. It has also recently implemented a new loyalty program for its flagship Lauder brand which, according to them, is proving to be a more responsive promotional tactic. At the same time it has embraced the K-pop cultural phenomenon with its MAC brand and related marketing and innovation efforts. Ongoing distribution expansion was the third lever of growth highlighted as it pushes
further into tier three and four cities. The promotional environment was described as still challenging in the market and management expects it will have to continue making ongoing price adjustments to remain competitive and avoid cross-channel and crossmarket dislocations. Momentum from strong Korean-based competitors was also acknowledged. All-in, we heard no reason to believe historical 20%+ growth rates for EL would resume in China anytime soon, but it appears to have initiatives in place that can enable it to continue outperforming the category’s 7-8% growth rate.



On Estee Lauder’s global acceleration plans, the aforementioned China initiatives, including greater push into make-up, is an important component in our view, but initiatives extend well beyond China. Its greater focus on make-up appears to be a global initiative, an important enabler being to reach a younger consumer cohort in the US; an objective it hopes to achieve through both product mix and marketing (e.g., its digital initiative with Kendell Jenner). Focus on make-up does not mean de-emphasis of skin care, according to the company. In fact, management is excited about what it described as a truly breakthrough new skin care product it expects to launch in the next 8-9 months (management was unwilling to share details this early). Lastly, it conceded that it needs to continue to shift the brands’ sales beyond department stores, with particular emphasis on specialty multi-brand stores and on-line platforms.

On the Clinique turnaround in North America, management acknowledges that this has been an area of most concern. Prior rejuvenation efforts (e.g., DDML+) failed to generate the expected response and management is now heavily focused on turning the business around in its core US market. It has plans to market the brand in a more selective fashion and to utilize more digital vehicles. It is also increasing initiatives behind more opening price point level products, including re-entry into foundation, re-launch of its lipstick portfolio and launches of new oil and face mask extensions. From our perspective, its efforts at point of purchase may prove most beneficial. It continues to look for ways to expand distribution, focus efforts behind higher growth markets and outlets and has plans
to modernize in-store counters to sell more products.

On travel retail, management expects growth to remain relatively slow in the near term as Chinese tourism remains subdued (we model mid-single-digit growth into the foreseeable future). The company believes Chinese consumers are shifting where they travel and shop (e.g., more to Japan given currency factors) and EL is trying to shift with them. It also has aggressive plans to increase its distribution, both in terms of number of airports with branded stores and range of brands featured within the airports.

Glam Glow may prove another upside surprise enabler. While investor attention remained centered on key markets and brands, management repeatedly mentioned the opportunity it sees in its recently acquired Glam Glow brand. They mentioned that the brand holds the rank of number one selling SKU in Sephora, and management sees it as the “next coolest mask globally.” It has plans to rapidly expand the brand around the globe.

Management highlighted its working capital opportunity early in the meeting with noted
benefits in accounts receivable and accounts payable since SMI implementation. EL’s inventory balance remains relatively bloated, though progress has been made recently and management believes a 130-140 days-sales-outstanding should be achievable over time for the firm. Timing of achievement, however, remains uncertain with an update they believe is likely to come with FY16 guidance.

Weekend Special (1)- Cathay Pacific, HONG KONG

Cathay Pacific

● The delayed effect of jet fuel's price decline on profitability is unequivocally good news, with a marked improvement in cargo volumes continuing from 4Q14 into the first half of this year.

● Explanations of CX's fuel hedge accounting treatment also took centre stage, with Murray explaining the differences between the cash flow effects and the losses taken through balance sheet reserves. Were the price of Brent to stay where it is today for the balance of the year, CX would be HK$5 bn better off than it was last year.

2015 off to strong start

Given CX's hedge book and forward fuel purchases (typically six weeks' worth), the drop in jet fuel prices at the end of 2014 has only really started impacting in 1Q15. The impact was felt immediately at the associate company, Air China (CA), as it does not hedge its fuel requirements. However, since CX accounts for these contributions on a quarter lagged basis, the benefits of a strong 4Q15 at CA will only show up in CX's 1H15 numbers.

Excess capacity in the cargo industry, generally, combined with loss of modal share to sea and freight miniaturisation (especially in the IT industry), will hammer performance between end-2010 and June of last year. Since then, CX's freight loads have been their best in the past four years, rising over 5 pp YoY in February alone, with freight traffic up 24% YTD, almost twice the rate of APAC regional cargo demand growth.

The growth of passenger revenues will likely map CX's 8%+ ASK growth this year, as jet fuel surcharges are rolled back and as it continues to develop new long haul routes, which are affected by lead in fares and longer stage lengths. February YTD, CX passenger loads are ahead by 1 pp to 84%, with demand rising 9%, due to passenger growth most obvious between HKG and North Asia (especially Japan) and the US.

CX's passenger fleet plan will see it concentrated around B773ERs, A350s, and A330 within two years, as all of its remaining A340s and B744s are retired. At the same time its freighter fleet will have completed its transition to 100% B748F. CX has no plans to change its fleet structure, given the low price of fuel and, if it were to reassess its fleet composition on this basis, it would probably only see older capacity retained in the freight division.

Malaysia Daily Update

DKLS Industries Bhd’s subsidiary DKLS Energy Sdn Bhd (DESB) will have to wait longer to cash in on its hydro-power investment in China. In a filing with Bursa Malaysia on Wednesday, DKLS said no definitive deal had been struck to dispose off Yong Yu Hydro Electric Development Co Ltd, in which DESB owns a 30% interest. The memorandum of understanding between Yong Yu’s shareholders and Sichuan Nengtou Electric Power Development Co Ltd has lapsed, as the parties failed to sign a definitive share transfer agreement before the expiry date, March 31. (StarBiz)

Boustead Plantations Bhd will expand its landbank by another 20% within two to three years from the current 83,400 hectares, says vice chairman, Tan Sri Lodin Wok Kamaruddin. He said although the company received offers from countries like the Philippines and Papua New Guinea to establish plantations, Malaysia would remain its top choice due to the country's stable political situation, fertile land as well as predictable weather. (StarBiz)

SHL Consolidated Bhd will seek an extension of six months from Bursa Malaysia Securities to meet the public shareholding spread requirement. SHL said on Wednesday its public spread was 23.53% resulting in a shortfall of 1.47% from the minimum requirement of 25%. As at to-date, the company has not drawn up any plan to rectify the shortfall in the public spread “but will endeavour to formulate such a plan as soon as possible”. (StarBiz)

Mudajaya Group Bhd has appointed its chief operating officer James Wong as the new group managing director and chief executive officer. Mudajaya Group chairman Datuk YusliYusoff said Wong will succeed Anto Joseph with effect from Wednesday. “Anto postponed his decision to retire a year earlier at the request of the board to facilitate a smooth transition in

management,” he said, adding Anto has agreed to continue to serve as special adviser to the board. (StarBiz)

Pharmaniaga Bhd aims to strike a balance in local pharmaceutical business by reversing the current ratio of non-concession versus concession from 42:58 to 60:40 in the next 3-4years. Chairman Tan Sri Lodin Wok Kamaruddin said the company would continue to expand its manufacturing capabilities in a bid to reduce dependency on government concession. “We are currently at 42:58 ratio. We are optimistic that non-concession business will grow from 42% to the 60% level within three to four years,” Lodin told reporters after the company’s annual general meeting here. (Business Times)

Xinghe Holdings Bhd, has entered into a strategic partnership with Arab Supplier Fabrication And Retail Sdn Bhd (Asfar), to enable both companies to become the main edible oil supplier in Jordan, the Middle East, Africa, Europe and South East Asia. Xinghe is a manufacturer of edible oils in China and Malaysia while Asfar is a manufacturer and exporter of palm-related products. In a statement today, Xinghe said the total investment value for the joint venture may come up to RM90mn in total within the next five years. (Bernama)

Malaysia Daily Update

Parkson: Parkson Retail Group ordered to pay RMB140m (Huge Financial outflow)

Parkson Holding Berhad (PHB)'s 51.7% equity-owned Parkson Retail Group (PRG) announced that the arbitral award dated 25 March 2015 by China International Economic and Trade Arbitration Comission has ordered the group to pay a total sum of RMB140m (RM83.9m) to its landlord in Beijing, China for the continued occupation of four floors of Metro City Shopping Plaza after the termination of its tenancy agreement. (Source: Bursa Malaysia)

**Trading in the securities of Parkson Holdings continued to be voluntarily suspended from 9am to 5pm on Tuesday. The department store owner and operator said it had requested for the continuation of the suspension pending the release of an announcement by its 52.71% owned Parkson Retail Group Ltd. Parkson Retail is listed on The Stock Exchange of Hong Kong Ltd. It has been suspended since 1.02pm on Monday. Trading in Parkson Holdings was suspended since Monday. (Source: Star Biz)

KPJ (ongoing M&A)

KPJ Healthcare Bhd has proposed to acquire the entire stake of Crossborder Hall (M) Sdn Bhd and Crossborder Aim (M) Sdn Bhd for RM4.718mn. KPJ said the acquisition was entered through its wholly-owned subsidiary, Kumpulan Perubatan (Johor) Sdn Bhd and AmanahRaya Trustees Bhd, the trustee for Al-'Aqar Healthcare REIT. Crossborder Hall and Crossborder Aim are the wholly-owned subsidiaries of Al-'Aqar, said KPJ in a filing to Bursa Malaysia today.(StarBiz)

Mydin to absorb RM15m in GST cost from monthly profits

Mydin Mohamed Holdings will absorb the cost of the GST of RM15m from the estimated RM300m monthly profits of its hypermarket and supermarket outlets. Mydin would recover a portion of the GST cost from its suppliers and from the stocks that are refundable under the existing SST. (Source: Business Times)

Karex Bhd has proposed to buy two pieces of land on which its plant is located for RM14.8mn. Its wholly-owned subsidiary Karex Industries Sdn Bhd had entered into two sale and purchase agreements with Tropical Produce Company (Pte) Ltd for the acquisition. The two pieces of land are located in Pontian, Johor, measuring approximately 4.53ha. (Bursa)

Integrax Bhd's co-founder Amin Halim Rasip has decided to part with his shares in the company, indicating he will be accepting Tenaga Nasional's (TNB) offer for Integrax at RM3.25 per share. Amin holds a 24.76% stake in the port operator. Given the different directions pursued by TNB and Perak Corp Bhd in respect to the future of the Lekir Bulk Terminal and Lumut Maritime Terminal assets, Amin said he will be selling his Integrax shares, as it will be more beneficial and productive for him to pursue the business projects and opportunities he intended to develop at Lumut, at a number of other suitable locations in Malaysia and the region, he said in a statement issued this evening. (Financial Daily)

MIDA, Panasonic Eco ink deal to enhance investment flow from Japan

MIDA has signed a partnership with Panasonic Eco Solutions Malaysia SB to enhance the investment flow from Japan. MIDA will leverage on the Japanese company's experience with Japanese SMEs. Panasonic Eco, a subsidiary of electric product giant Panasonic Corp, is one of the green-driven engineering solutions-based company which provides know-how on energy, air, water and ground solutions. (Source: Business Times)

Takaso Resources Bhd has called off the proposed acquisition of Dynavance Construction Sdn Bhd. Takaso and Dynavance Construction have decided to call of the shares sale agreement (SSA) that both parties had entered into in October last year, which would have seen Takaso buying the entire shareholdings of Dynavance for RM9.5mn in cash. In a filing with Bursa Malaysia today, Takaso said both parties had, vide a deed of mutual rescission (DMR), decided to revoke the SSA with effect from today. Among the DMR terms is that Dynavance will release Takaso from due performance and observance of all its obligations and covenants under the SSA, and likewise Takaso is to apply the same to Dynavance. (Financial Daily)

Tanjung Offshore Bhd executive director Tan Wee Koh and independent and non-executive director Shahrizal Hisham Abdul Halim have both resigned from the O&G services company, for “personal reasons”. Tanjung Offshore, via separate filings on Bursa, also announced the appointment of two new independent and non-executive directors, namely Datuk Suraj Singh Gill, 44, and Datuk Syed Hussian Syed Junid, 54. (Financial Daily)

Pharmaniaga to reduce dependency on government concession

Pharmaniaga Bhd aims to strike a balance in local pharmaceutical business by reversing the current ratio of non-concession versus concession from 42:58 to 60:40 in the next 3-4 years. The company would continue to expand its manufacturing capabilities in a bid to reduce dependency on government concession. (Source: Business Times)

Malaysia daily update

Amcorp steps up UK venture with Temasek

Amcorp Properties has partnered with Temasek Holdings in a redevelopment project in London valued at more than £1bn (RM5.46bn). Their JV firm, Bankside Quarter (Jersey) Ltd, on Friday bought the companies that own Sampson House and Ludgate House for £308m (RM1.68bn), freehold office buildings next to the River Thames. (Source: Star Biz)

Malaysia Airlines to charge customers 6% GST

Malaysia Airlines’ customers will be charged the 6% GST on applicable goods and services supplied by the national carrier when it comes into effect on April 1. Malaysia Airlines implementation adhered to the government’s announcement during the tabling of its Budget 2014 on Oct 25, 2013. GST will be replacing the company’s existing Sales Tax and Service Tax. (Source: Star Biz)

Astro pre-tax profit rises to RM720.9m

Astro Malaysia’s pre-tax profit for FY15 rose to RM720.88m from RM569.23m in the previous year. Revenue grew to RM5.23bn from RM4.79bn a year ago, following the expansion in its customer base and increase in average revenue per user (ARPU) in sales of value-added products and services as well as cost control. The company also promised to continue delivering growth, which is derived from advertising expenditure, sales of rights content and leveraging its invested infrastructure, among others. (Source: Business Times)

Integrax: Game over

TNB has secured more than 50% acceptance for its takeover offer of port operator Integrax, effectively gaining control of the company in a corporate battle that had lasted close to 3 months. TNB announced that it had secured 50.83% in Integrax, making its offer unconditional. (Source: Star Biz)

Seacera to develop project worth RM10bn in GDV

Seacera is expected to develop a township-concept project on a 202.34 hectare site in Hulu Langat with a GDV of more than RM10bn. It was also mentioned that Seacera’s project would definitely be higher in value than other RM10bn GDV worth of projects in the area. The company has a landbank of 242.8 hectares. (Source: Star Biz)

Datasonic subsidiary awarded RM32m contract

Datasonic’s wholly-owned unit, Datasonic Technologies SB, has received a letter of award from the Home Affairs Ministry to undertake maintenance services for personalisation process at the National Registration Department worth RM32.56m. The contract was for a period of 2 years commencing May 1 until April 30, 2017. The contract is expected to contribute positively towards the future earnings and net assets per share of Datasonic for FY16 and the financial years thereafter for the duration of the contract. (Source: Business Times)

BHIC gets additional RM531m Govt contract

Boustead DCNS Naval Corp SB, a 60% owned unit of Boustead Heavy Industries Corp Bhd (BHIC), has received an additional contract with a ceiling value of RM531.2m from Malaysian government. The contract was for the in-service support (ISS) for 2 units of Prime Minister’s class submarines for the Royal Malaysian Navy. Additional contract value for the extension of the ISS contract would commence today to May 31, 2017. (Source: Business Times)