Reports » Malaysia

Malaysia stock market and companies daily report (January 29, 2013)

Contributed by Shares Investment

AirAsia To Develop Units In The Philippines And Japan
AirAsia, the low cost carrier (LCC) is going to develop its Philippines and Japanese units, and views India as an exciting market. According to chief executive officer Tan Sri Tony Fernandes, as Malaysia has became a “cash machine”, the management is diverting its focus to its other core markets in Thailand and Indonesia. The airline believes these entities would generate similar profits as Malaysia in the future. Apart from this, AirAsia is targeting the Philippines and Japanese markets, where the LCC penetration is still in its infancy and thus have the utmost growth potential; Fernandes said. While other ASEAN and Asian countries seemed attractive, the group will focus on its existing operations that offer larger domestic alternatives and bigger populations, he added. “In terms of non-ASEAN countries, India is an exciting market and I have been overwhelmed by the developments of the country recently in terms of promoting air travel. We will continue to explore opportunities there but I believe this market offers the most growth potential in terms of travel.”
Significance: AirAsia has recently finalised its strategic five-year review of all its businesses. Fernandes believes that 2013 will be a stronger year in terms of the airline load factors and yields as the group has the economies of scale and cost to buffer any competitive pressures.

Maybank’s Philippines Ops Receives RM305m In Investment Boost
Maybank Berhad injected US$100 million (RM305 million) worth of capital into its Philippines operations in efforts to spur its growth in Southeast Asia’s fifth largest economy. The banking group launched a new corporate head office in Manila last Friday and announced plans to double its number of branches in that country to 100 by 2014, and thereafter to 200 by 2018. Industry watchers pointed out that Maybank Philippines (MPI), which is the 24th largest bank by assets, may eventually go for a listing. This is because the Philippine central bank’s new ruling from last year requires banks that are controlled by their foreign counterparts to be listed on the Philippine Stock Exchange. Back in 2010, Maybank injected US$50 million (RM152.5 million) into MPI for network expansion. Analysts note that the Philippines which has the second largest population in ASEAN, is one of the most under-penetrated banking markets in the region. Thus, this makes it attractive for foreign banks seeking growth.
Significance: MPI whose assets has grown almost nine-fold to US$1.3 billion (RM3.9 billion) since 1997, made a pre-tax profit of US$20 million (RM61 million) last year compared with US$12 million (RM36.6 million) a year earlier. Furthermore, the country’s economy grew 6.5 percent in the first nine months of 2012.

Creador Acquires Cereal Maker PT Simba Indosnack
Asia-based private equity firm Creador, which includes IJM Corporation executive deputy chairman Tan Sri Krishnan Tan among in its board members, has bought PT Simba Indosnack Makmur, Indonesia’s second-largest cereal player. PT Simba has considerable presence in the snacks segment with revenue of US$22 million (RM66.88 million), it said in a statement without providing the value of the deal. PT Simba was previously a unit of Godrej Consumer Products Limited India, which had acquired it as part of a larger acquisition of Megasari Group in 2010. Nontheless, PT Simba was deemed a non-core business unit to Godrej’s strategy which focuses on home care, hair care and skin cleansing. Creador, which has also invested in Old Town White Coffee, stated that the acquisition was a compelling choice as cereal consumption in Indonesia was one of the lowest in the region. The market grew at 16 percent in value terms between 2006 and 2011 which indicated strong prospects for future growth.
Significance: It was stated that PT Simba is the second largest player with a 17 percent market share, second only to Nestle in the Indonesian market. The market here is worth US$1.5 billion (RM4.56 billion).The PT Simba acquisition was Creador’s fourth deal since its inception in 2011 and its second transaction in Indonesia, after MNC SkyVision in the second half of 2012.