GAP, which on April 30 2010 obtained an approval from the Malaysian Industrial Development Authority for the manufacturing licence for the integrated petrochemical plant, is 50 per cent owned by Mubadala Capital Sdn Bhd (MCSB).
MCSB's controlling shareholder, Datuk Zainal Abidin Ahmad, is also the chief executive and controlling stakeholder of Zecon.
Petroleum Bhd and Kencana Petroleum Bhd announced a RM11.5 billion merger plan that will become the country's largest oil and gas (O&G) service provider.| Written by Joanne Nayagam |
| Monday, 25 July 2011 12:10 |
KUALA LUMPUR: The hustle and bustle at a Vincci shoe store, even during non-sale periods, is a telltale sign that local fashion company Padini Holdings Bhd has come some distance from its genesis as a simple garment maker four decades ago. Its success in making its mark on the local fashion scene goes beyond the homegrown shoe label to its other house labels like Seed and Padini Authentics.
Despite an upward trend in its momentum, however, the company is setting aside the next two years to iron out the creases in its supply chain and logistics. “One thing that we are looking at seriously is making sure that the existing doors have good growth rather than [to] keep expanding,” said CY Cheong, creative director with Padini, in a recent interview with The Edge Financial Daily.
The step back from expansion to consolidation mode to perfect its core mechanics, he said, is necessary to ensure the group can grow faster and more efficiently.
Despite the medium-term goal of perfecting its internal systems, Padini has scored well on its financial report card.
The last four years have seen uninterrupted growth, despite the 2008/09 financial crisis. Between 2006 and 2010, revenue has risen from RM286.11 million in 2006 to RM520.88, an average of 16.2% a year. Net profit surged from RM27.69 million to RM60.97 million, representing a 21.8% compound annual growth rate over the past four years.
Its market capitalisation stood at RM717.12 million as at last Friday’s RM1.09 close, being 10.58 times earnings for its current year ended June 30, 2011, according to Bloomberg data.
Indeed, some 40 years after its founding, Padini holds the enviable record as the largest and most profitable of Malaysia’s listed homegrown fashion companies. The company began in 1971 as a garment manufacturing and wholesale concern. It entered the retail industry in 1975 with its flagship brand Padini, while its other successful brand, Vincci, was established in 1986. Its other brands include PDI, Miki and Rope.
With its eye set to win more business in the region, Cheong said the group knows its operations at home need to run even more efficiently.
“I would say we are in quite a transitional stage of moving from a domestic-based company to regional. And for that, the way of working must change. The supply chain issue must be something we can address, because when you talk about doing business overseas, late delivery can sometimes be a problem, and also logistic[s],” said Cheong, adding that the company is constantly looking at increasing same store sales though physical store expansion may not be as aggressive for now. Money will still be spent to keep existing stores vibrant, to continue attracting customers while getting its existing loyal customers to buy more.
Even though overseas revenues currently contribute less than 10% to Padini’s total revenue, the Dubai Vincci store in Diera City Centre, is on par with the group’s best stores in Malaysia, such as at Mid Valley Megamall, Sungei Wang Plaza and Fahrenheit 88 (formerly KL Plaza) in Kuala Lumpur, Cheong said.
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| Cheong: I would say we are in quite a transitional stage of moving from a domestic-based company to regional. |
And there’s good promise for growth. Notably, Padini’s partners in the Middle East are local distributor heavyweights that also distribute more internationally-recognised labels. For instance, Al Shamsi Holdings Llc in UAE, Oman, Qatar and Bahrain handle Zara, Promod, Stradivarius and Women’s Secret, Cheong said. Padini also has other international partnerships in Morocco and Egypt.
He admits, though, that some of its partner operations abroad aren’t doing as well as the company would like due to certain gaps in its supply chain. The need to bridge these gaps was even more evident in the last six months, when the cost of manufacturing and raw materials escalated. As such, one of the group’s top priorities is to ensure smooth and efficient product movement, from manufacturing to delivery.
As a part of the internal restructuring process, Padini has invested in a management information system. In 2008, the company put out RM7.5 million to acquire the SAP enterprise resource planning system which allows it to streamline all its processes into fewer steps and coordinate sales based on past customer demands. “SAP has been implemented and we do see improvement and better control of our work process. We need probably another year for our users to get used to the system,” said Cheong.
As Padini develops its brand by creating a stronger foothold locally, the brand will continue to provide what has been the key to its growth thus far: adaptibility. “I think change is essential in order to keep the business moving,” said Cheong.
“It can be a big change, but you’ve got to feel that what your customers want and need is reflected in your product,” he said.
Group managing director-cum- group chief executive Tan Sri Leong Hoy Kum is upbeat that the units, worth RM450,000 to RM1.2 million each or RM700 to RM800 per sq ft, will be snapped up during the launch.
The residences come with space sizes of 550 sq ft to 1,779 sq ft.
"The right product in the right location will always sell well. We are bullish on the outlook led by the Economic Transformation Programme," Leong told Business Times.
| Friday, 08 July 2011 08:32 |
KUALA LUMPUR: CIMB Equities Research has a Buy call on YTL POWER INTERNATIONAL BHD with a sum-of-parts target price of RM2.80. It said on Friday, July 8 that YTLP is selling a 43% stake in its unit YTL Jawa Power Holdings to Marubeni Corp for US$224 million or US$1.5 a MW, which is a fair price. The deal could be positive as the partnership will improve YTLP’s chances of clinching other Indonesian power projects. “However, we cut our FY11-13 core EPS by 2-11% for lower contributions from YTL Jawa and higher WiMax losses. Our SOP-based target is now 2% lower at RM2.80 as cash received from Marubeni does not offset the drop in contributions from YTL Jawa and higher borrowings. “We also cut FY11-13 net DPS by 31% to reflect a more conservative payout policy,” it said. CIMB Research said despite the downgrade in its numbers, YTLP remains a BUY as it believe its share price already reflects the WiMax uncertainties and lower dividends. It said there could be a re-rating on the back of M&A and positive WiMax developments. |
