The Securities Commission Malaysia (SC) has announced a significant extension to the deadline for issuing Real Estate Investment Trusts (REITs) annual reports.

Previously set at two months after the financial year end, the new timeline now allows for a generous four-month window.

This adjustment brings the reporting timeline for listed REITs in line with that of public-listed companies (PLCs) on Bursa Malaysia Securities Berhad (Bursa Malaysia), granting them equal time for annual report issuance.

The move aims to ensure consistency across both types of entities, recognising the similarities in content requirements.

Despite the extended timeline, unit holders of listed REITs can still expect to receive financial information within two months after the REIT’s financial year end through its quarterly announcements on Bursa Malaysia.

Perbadanan Kemajuan Negeri Selangor (PKNS) has appointed renowned actor and successful entrepreneur Datuk Rosyam Nor as its Entrepreneurship Ambassador, effective December 1, 2023. The appointment letter was presented by PKNS Deputy Chief Executive Officer (Corporate), Suhaimi Kasdon, at the PKNS Headquarters Building.

According to Suhaimi, Rosyam Nor was chosen not only for his prominent name in the entertainment industry but also for his extensive experience of nearly 20 years in entrepreneurship, particularly as a producer of agro films and retail.

“The appointment of Rosyam Nor as our spokesperson is seen as a means to better promote entrepreneurial activities conducted by the Entrepreneur Development Division (BPU) to entrepreneurs nationwide, particularly in Selangor,” Suhaimi said.

He emphasised the significant role of an entrepreneurship ambassador in attracting followers through active use of social media platforms and disseminating information about BPU programs through various digital channels.

Suhaimi further highlighted that Rosyam Nor’s appointment symbolises PKNS’s commitment, through BPU, to continue designing activities for entrepreneurs across the country to help them develop their respective businesses.

He mentioned plans for new programs and improvements to existing ones to ensure that all initiatives meet the current needs of entrepreneurs, aiming to create a progressive, competitive, and resilient society.

Rosyam Nor recently found himself embroiled in controversy following remarks made during a podcast. In the podcast titled ‘Hitam Putih Kehidupan’ and uploaded to the Suhan Channel on TikTok, Rosyam made statements regarding prostitution dens for foreign workers.

He suggested that such establishments are necessary facilities for these workers, many of whom leave their families behind to earn a living in Malaysia. Rosyam implied that these dens could serve as a means to curb and reduce crimes such as rape involving foreign workers.

These comments sparked outrage and drew varied reactions from netizens and the public. As the statements went viral, the actor issued an apology via his Instagram account. He expressed surprise at the controversy and apologized for any offense caused.

Rosyam Nor clarified that the remarks were made during a discussion on the podcast and urged individuals to watch the full video to understand the context. He emphasised that it was his personal opinion and encouraged people to think and judge for themselves.

Sime Darby Auto Bavaria Sungai Besi, one of Malaysia’s oldest Auto Bavaria dealerships, will relocate to its new 4S dealership in Balakong come March.

With 27 years of operation under its belt, the dealership has represented the BMW brand with dedication, earning accolades like the BMW Excellence Club Award.

Former and current personnel will gather at Sungai Besi to mark the transition and celebrate the dealership’s legacy.

Auto Bavaria, Managing Director, Vi Thim Juan, emphasised the commitment to continue delivering top-notch service at the new Balakong location. “Recognising and commemorating the legacy and milestones of Auto Bavaria Sungai Besi is paramount as we wish to ensure the seamless transfer of our united spirit and dedication to our new Balakong dealership. Auto Bavaria patrons can be rest assured of our ongoing determination going the extra mile in providing the best in class service in the premium automotive industry.” he said,

The new Auto Bavaria Balakong will feature BMW, MINI, and BMW Premium Selection, boasting modern design, customer consultation amenities, and digital sales tools.

On-site BMW Geniuses will enhance the premium experience, while lush landscaping will complement the luxurious interior, welcoming visitors with visual appeal.

Mr DIY Group’s (MRDIY) FY23 results met expectations on its solid sales and GPM recovery. Its current market valuation is undemanding, considering its fundamentals to deliver solid growth amidst a soft business environment, thereby outperforming most consumer sector peers.

RHB Investment Bank (RHB) said today that it likes MRDIY for its entrenched store network and effective business model to capture resilient consumer spending. A positive outcome of the ongoing civil servant salary scheme review is also a catalyst for the stock.

FY23 results in line

The group’s core net profit of MYR561m (+17% YoY) accounted for 99% and 100% of our and consensus forecasts. Post-results, RHB’s FY24-25F earnings are <3% lower after making housekeeping changes.

Correspondingly, their DCF-derived TP also drops to MYR2.20 (inclusive of a 4% ESG premium), which implies 33x P/E FY24F or close to the stock’s 3 year-mean.

Results review

YoY, FY23 revenue grew 9% to MYR4.4bn, mainly underpinned by the new store expansion (+175 outlets to total 1,261). SSSG was at -3.7%, being negatively impacted by ensuing demand elasticity on ASP increases and soft consumer sentiment.

Meanwhile, FY23 GPM expanded by 4ppt to 45.4% to reflect ASP increases and the normalisation in freight costs.

This more than offset the rise in operating costs and propelled the 17% YoY jump in FY23 PBT to MYR753m. QoQ, 4Q23 revenue and net profit rose 8% and 28% due to favourable year-end seasonality and product mix. FY23 DPS totalled 3.2 sen, which points to a higher 54% payout ratio vs FY22’s 48%.

Outlook

RHB expects its store network expansion to remain the primary growth driver. MRDIY plans to open 180 new stores in FY24, with a focus on the underpenetrated East Malaysia region, which currently generates higher average sales per store. In addition, the negative SSSG trend could be reversed, with the effect of demand elasticity likely to wear off.

On the other hand, Mr DIY has no plans to adjust ASPs, notwithstanding the meaningful hike in freight costs in recent months as the impact is manageable. Instead, RHB believes the company could be more aggressive with price promotions to induce consumer spending, leveraging on its healthy GPM.

Essentially, RHB expects that its proven business model of offering a wide range of products at competitive prices across convenient locations should continue attract sticky demand even if consumer sentiment remains subdued.

Downside risks to RHB’s recommendation include weaker-than-expected consumer sentiment and a sharp rise in operating costs.

Meanwile, Kenannga Investment Bank (Kenanga) said MRDIY’s FY23 results met their expectations. Its FY23 net profit grew 16% driven by store expansion, price hikes and lower freight cost. It is planning for a net addition of 180 stores in FY24.

Kenanga reduced their FY24F net profit forecast by 2% and trimmed their TP also by 2% to RM1.75 (from RM1.78) but maintain an OUTPERFORM call.

The company declared a 1.0 sen DPS in 4Q, bringing its full-year DPS to 3.2 sen (54% payout), up from 2.4 sen in FY22 (43% payout). YoY, its FY23 top line grew 9% propelled by a net addition of 175 stores (bringing its total store count to 1,255) and a 16% growth in transactions to 165m, partially offset by a 5% reduction in average basket size to RM26.40 (from RM27.80).

Its monthly sales per sq ft eased 4% to RM35.60, vs. RM37.20 in FY21-22, which could be attributable to the impact of carryover effect of previous price hikes, but still above RM34.50 in FY20.

Its gross profit rose by a steeper 20% as it gross margin expanded to 45.4% (from 41.3%) driven by lower freight costs and the price hikes.

Its monthly gross profit per sq ft hit a record RM16.10 in FY23 (vs. RM15.00 to RM15.40 over the past three years) for the same reasons.

However, its net profit only grew 16% due to higher staff and other operating costs, primarily associated with an upwards revision in the minimum wage in May 2022 and store expansion.

QoQ, its top line grew 8% underpinned by store expansion and a seasonally strong period on the back of festivities and school holidays.

Its net profit rose by a sharper 28% driven by margin expansion.

The key takeaways from the results’ briefing are as follows:

1. It is planning for a net addition of 180 stores in FY24. It believes that it will not be materially affected by the weak consumer spending sentiment amidst sustained high inflation at present given its value-for-money offerings of hardware and household products.

2. Its automated warehouse building has been completed, pending equipment installation by Apr 2024. The warehouse should fully come online by 3QFY24, which will bring about earnings and cash flows enhancement of about RM10m and RM20m, respectively, from reduced labour and warehouse rentals.

3. It intends to continue with quarterly dividend payouts at 50%-65% of its net profit backed by its strong financial standing and robust cash flows.

Valuations

RHB has also fine-tuned down their TP by 2% to RM1.75 (from RM1.78) based on unchanged targeted FY24F PER of 25x, which is at a 5x multiple premium to the average forward PER of its regional peers of 20x to reflect a relatively under-penetrated home improvement market in Malaysia. There is no adjustment to their TP based on ESG given a 3-star rating as appraised by Kenanga.

The Yang di-Pertuan Agong, Sultan Ibrahim, has issued a stern reminder that he will not entertain any requests from parties attempting to disrupt the political stability of the country.

In his inaugural address after being sworn in as the 17th Yang di-Pertuan Agong on January 31st, Sultan Ibrahim emphasised that all parties must accept the reality and respect the Unity Government that has been formed.

His Majesty also stated that if any party wishes to engage in politics, they should wait for the upcoming elections.

“All parties are aware that my priority is the well-being of over 33 million Malaysians out there. Therefore, I hope all honorable members will focus on advocating for their interests, rather than for the interests of political parties or themselves,” said His Majesty.

Sultan Ibrahim made these remarks during the Opening Ceremony of the Third Session of the 15th Parliament at the Parliament Building today, which was attended by Members of the House of Representatives and Members of the Senate.

Yang di-Pertuan Agong, Sultan Ibrahim has granted permission to the Speakers of the House of Representatives and the Senate to take action against any member who crosses the line, including imposing a 14-day suspension from attending sessions.

Sultan Ibrahim reminded all Members of Parliament and Senate to demonstrate good conduct throughout the parliamentary sessions. He also has instructed all MPs and Senators to uphold decorum and discipline, as well as to use polite language.

“Parliament is where lawmakers gather to create rules and all Honourable Members are legislators themselves.

“It is unreasonable if the lawmakers themselves fail to follow the rules they have created. Therefore, I hope all members will set a good example when in the House.

“Maintain decorum and discipline and use polite language, rather than insulting others,” His Majesty said during the opening ceremony of the Third Session of the Fifteenth Parliament today.

Consumer Front of Sabah (CFOS) president Nordin Thani has advocated for an extension of the subsidised airfare scheme for one-way economy class flights from the peninsula to Sabah, Sarawak, and Labuan in conjunction with Hari Raya Aidilfitri. Thani proposed that the existing three-day offer, with a maximum fare of RM599, should be prolonged to two weeks to enable more residents from these regions to access reasonably priced flight tickets when returning to their hometowns for the festive season.

Thani highlighted the current unfairness faced by individuals who cannot take leave during the Hari Raya holidays, as they are compelled to work during the festival and can only travel back to their hometowns after the holidays have concluded.

He stressed the necessity of extending the maximum airfare price a week before and after Aidilfitri, totaling two weeks, to accommodate such individuals, a local media reported.

Thani urged the government to consider this proposal, emphasising its significance in providing the people of Sabah, Sarawak, and Labuan with the opportunity to purchase flight tickets at reasonable rates. He said that this extension would facilitate holiday planning and reservations during the festive period.

Transport Minister Anthony Loke Siew Fook had previously announced the government’s implementation of a maximum fare of RM599 for one-way economy class flights from the peninsula to Sabah, Sarawak, and Labuan, applicable for three days before Aidilfitri.

This initiative aims to assist individuals in traveling back to their hometowns for the festival in April. Any fare increase beyond the set maximum price during the specified period will be covered by government subsidies.

Loke affirmed that the Ministry of Transport would seek feedback from relevant stakeholders, including the Minister of Religious Affairs, to determine the exact date of Aidilfitri before finalising the implementation of the maximum ticket price.

Thani also raised concerns about potential misuse of the subsidised fare scheme by individuals from the peninsula for holiday purposes, thereby limiting the opportunity for residents of Sabah, Sarawak, and Labuan to return to their hometowns.

He urged airline operators to consider deploying larger aircraft with higher capacities to accommodate the anticipated surge in passengers traveling home for Hari Raya.

World of Business Ideas (WOBI) announced the inaugural World Business Forum that will be held at the Sands Expo & Convention Centre, Singapore on 10 & 11 July 2024.

Having made its mark in major business capitals such as New York City, Milan, Mexico City, Madrid, and Sydney, the World Business Forum brings together senior-level decision-makers from various industries to glean insights from the world’s most influential business thought leaders.

With over 20 successful editions worldwide, the World Business Forum is now making its debut in the ASEAN region with its first summit in Singapore.

Themed “Purpose: Navigating Uncharted Waters,” the conference will delve into the profound impact of purpose on individuals and organizations. Purpose serves as a catalyst, fostering innovation and creativity while empowering individuals to navigate today’s complex challenges.

WOBI, Director, Asia Pacific, WOBI, Daniel Hernandez, said, “ASEAN stands as a vibrant and dynamic region, boasting a wealth of world-class leaders and innovators. Our entry into this market underscores our unwavering commitment to serving diverse audiences globally, ensuring that the transformative insights and experiences of the World Business Forum resonate across borders.”

The World Business Forum Singapore will feature esteemed keynote speakers, including former Grand Slam Tennis champion Andre Agassi, former Hewlett-Packard (HP) Chairman and CEO Carly Fiorina, digital transformation expert Charlene Li, and business thinker Gary Hamel, among others.

Singapore, renowned as one of the leading business hubs in the ASEAN region and the world, is expected to attract high-level executives and professionals globally. The 2024 edition marks the 21st iteration of the World Business Forum, which has hosted influential leaders and thinkers such as James Cameron, Indra Nooyi, Muhammad Yunus, and Steve Wozniak in previous years.

Malakoff Corporation’s FY23 had a write-off 4Q23 results were again below expectations as net losses widened sequentially due to impairments and associate losses.

Maybank Investment Bank (Maybank IB) said a final dividend post release of audited accounts remains a possibility. Longer term however, they think Malakoff might need to review its dividend policy to fund new projects.

Maybank IB maintains SELL with a higher MYR0.55 (+6%) TP (SOPbased) following earnings revisions.

Results below expectation

Malakoff’s 4Q23 net loss widened to MYR357m (from MYR86m net loss in 3Q23, MYR42m net profit in 4Q22), bringing FY23 net loss to MYR837m (MYR302m net profit in FY22).

The QoQ deterioration was due to impairments (MYR96m) and the recognition of associate losses in relation to Al-Hidd.

No dividend was declared in the quarter, although a final dividend remains possible upon finalisation of the audited accounts in Mar 2024.

Fuel margins normalising Malakof

The breakdown of capacity and energy payments by plants remain unknown at the time of writing. The negative fuel margin incurred by the coal plants in previous quarters appears to have normalised.

Recall Malakoff had already made a round of impairments on 40% associate Al-Hidd in FY22.

Without the impairment and associate losses, Maybank IB estimates Malakoff would have been profitable in 4Q23.

Dividend policy unsustainable?

Maybank IB raised their FY24/25 net profit forecasts by 23%/12% respectively to incorporate latest run rates, and introduce FY26 forecasts. Their TP (based on a sum-of-parts with each entity valued on a DCF assuming 8.9% WACC) is raised to MYR0.55 (from MYR0.52 previously), and they maintain SELL.

Maybank IB thinks Malakoff might need to review its current dividend policy (currently >70% payout) in order to fund new projects.

Kitchen-Sinking Quarter

Malakoff Corp’s FY23 results beat expectations on a stronger turnaround in 4Q23 led by better fuel margin impact after stripping off sizeable impairment on its JV.

In its Malaysia Results Review note today, RHB Investment Bank Berhad (RHB) said they expect earnings recovery to continue in FY24 on normalisation of fuel margin impact.

RHB’s  call is largely premised on its decent dividend yield and resilient future earnings, anchored by the Alam Flora contribution and continuous plant stability.

Beat expectations

FY23 core net loss of MYR409m came in above expectations, accounting for 79% and 82% of RHB’s and Street full year losses, largely led by a turnaround in 4Q23, with a core profit of MYR70m in 4Q23 after three quarter of losses.

Results review

Malakoff Corp’s 4Q23 core profit was MYR70m after stripping off MYR96m impairment losses on its 40% owned foreign associate in Bahrain, AI- HIDD independent water and power project (IWPP) and also its respective one-off MYR333m impairment-led share of losses from this associate.

This is a strong QoQ turnaround from a core loss of MYR86m in 3Q23 due to positive fuel margin impact following the stabilisation of applicable coal prices.

Cumulatively, revenue decreased by 12% YoY in FY23 on the back of lower energy payments from Tanjung Bin Power (TBP) plant and the absence of GB3 power plant’s revenue following the expiry of the power purchase agreement (PPA) in Dec 2022, masking the higher contribution from the Tanjung Bin Energy (TBE).

The company recorded a core loss of MYR409m (vs a core profit of MYR671m in FY22), no thanks to the negative fuel margin impact and lower JV & associate contribution.

This, however, was partially cushioned by lower finance costs and depreciation charges.

Outlook

Despite substantial impairment losses made on AI-HIDD IWPP investment, which encapsulates a combined-cycle gas turbine (CCGT) and water desalination plant, Malakoff Corp is still operationally profitable and the impairment made assumed no extension on its concessions beyond 2027.

Meanwhile, RHB finally saw a positive fuel margin impact in 4Q23 and expect the magnitude of such impact to normalise following the stabilisation of coal prices.

TBP and TBE recorded a better equivalent availability factor (EAF) of 84% and 78% in FY23 (from 82% and 65% in FY22).

On the other hand, Alam Flora continued to contribute stable earnings of MYR83m in FY23 (+15% Y) due to increase in frequency of cleansing and solid waste activities under the concession business.

RHB reiterates BUY as the FY24F-25F earnings remain largely unchanged but RHB’s DCF-based TP is lifted to MYR0.77 from MYR0.72 after updating the latest net debt numbers and lowering our discount rate to 7.7% (from 7.9%) to factor normalisation of fuel margins.

RHB also ascribe a 10% discount, based on their ESG score of 2.5.

Downside risks in unscheduled outages, higher operating costs, and disruption in fuel supply.

Ryu Ok Hada always wanted to help people, but now the South Korean trainee doctor has walked off the job and stands outside the hospital where he worked, holding his medical gown in his hand.

Park Dan, who recently realised his childhood dream of being an emergency physician, is also one of over 7,800 interns and residents who have resigned in a confrontation with the government, which threatens to arrest them.

Ryu and Park say the junior doctors, a crucial cog in South Korea’s highly regarded medical system, are overworked, underpaid and unheard.

Hospitals have turned away patients and cancelled surgeries after about two-thirds of the country’s young doctors walked off the job this month in protest.

The young doctors say their pay and working conditions should be the priority, rather than the government’s plan to boost the number of physicians. The authorities say more staff are needed to increase healthcare services in remote areas and meet the growing demands of one of the world’s most rapidly ageing societies.

“The current medical system in South Korea, which is a great one, is run by making cheap trainee doctors keep grinding,” Ryu, 25, told Reuters.

Senior doctors and private practitioners have not walked out but have held rallies urging the government to scrap its plan, with 400 gathering in Seoul on Sunday (Feb 25).

But the government’s plan to boost medical school admissions is popular, with about 76 per cent of respondents in favour, regardless of political affiliation, a recent Gallup Korea poll found.

TORN BETWEEN PATIENTS, POLICY

Intern and resident doctors in South Korea work 36-hour shifts, compared to shifts of less than 24 hours in the US, according to the Korean Intern Resident Association. It says half the young US physicians work 60 hours a week or less, while Korean doctors often work more than 100 hours.

Ryu said he worked more than 100 hours a week at one of the country’s most prestigious university hospitals, for 2 million won to 4 million won (US$1,500 to US$3,000) a month including overtime pay. A first-year US resident averages about $5,000 a month, according to American Medical Association data.

Hospitals have not processed the resignations of the protesting doctors, who say they are not on strike. The government has ordered them back to work, threatening to arrest them or revoke their licenses, saying their collective action cannot be justified and people’s lives must come first.

Park and other doctors say the order is unconstitutional, forcing them to work against their will.

The doctors on walkout represent just a fraction of South Korea’s 100,000 doctors, but they can make up more than 40 per cent of staff at large teaching hospitals, performing crucial tasks in emergency rooms, intensive care units and operating rooms.

Emergency rooms at South Korea’s five biggest hospitals were on “red alert” on Sunday, meaning they were running out of beds. Prime Minister Han Duck-soo said on Friday that public hospitals would stay open longer and on weekends and holidays to meet demand. – CNA