☕️ Aquaria KLCC operator files for IPO and its beautiful financials

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

Where is the world’s largest violin-making town? Thinking of some exotic town in Europe? Think closer to home. It’s Huangqiao, located in eastern China’s coastal Jiangsu province. The town contributes about 30% of the world’s share of violin production and 70% of China’s. It has 220 violin-making businesses, employing more than 10% of the town’s population of 230,000. Fenglin Musical Instruments is the town’s largest violin manufacturer and its chairman, Li Shu, is credited with transforming the town into the violin capital of the world. He also claims the company that was founded in 1971 to be the world’s largest violin manufacturer.

Only 1.1% of Danes (orang Denmark) have to work 50 or more hours a week, a significantly lower proportion than the world average of 10.2%. In comparison, the UK is 10.8% and the US is 10.4%. As for Malaysia, no idea - but please attend to the poll below. Denmark is consistently ranked among the top 5 countries in the world for work-life balance rankings. Danes are so happy at work that 60% of them would continue to work even if they won the lottery and became financially independent. Some other policies that make working life great in Denmark: a minimum of 5 weeks of paid annual leave per year, and 6 months of paid maternity and paternity leave.
View ranking: Global Work-Life Balance Index 2024

When your body mass index is correlated to your promotion chances. In Terengganu, it’s found that 40% of the state’s policemen and support staff have a BMI that disqualifies them from promotion, according to the state’s top cop. The BMI threshold is set at 28 from Jan 1. Staff who failed to meet this BMI threshold may not be promoted even if they excelled in their duties and received commendations. Initiatives are in place to help policemen to reduce their BMI by encouraging them to exercise. Cutting down sugar in the tarik might help a lot, we think. 

3. IN MALAYSIA 🇲🇾

Sarawak: Top-5 performing state and its flooding state
Sarawak Premier Abang Johari Openg announced that Sarawak was ranked among the top five states in Malaysia for economic performance last year, recording an outstanding RM14.2 bil of revenue in 2024. In terms of exports, Sarawak holds a strong position, currently ranking fourth in the country’s exports to international trading partners.

Perhaps, Sarawak should direct some of the revenue generated towards flood prevention infrastructure as of last Saturday, there were 12,846 victims housed across 62 temporary evacuation centres due to the worsening flood situation in the state. The number of victims recorded an 11.14% increase compared to the figures on Friday. According to reports from the Sarawak Disaster Management Committee Secretariat, Bintulu remains the worst-affected district, where 47.13% of the recorded victims came from the district. Interestingly, based on 2020 data by the Malaysia Department of Statistics, the Bintulu district is the top economic centre of Sarawak, even above the Kuching district, contributing close to 30% of the state’s gross domestic product (GDP).

To dive down on the reason why the flooding in Bintulu is so severe, Tourism Minister cum Bintulu MP Tiong King Sing shed light on the causing factors by stating flaws in the district’s drainage system and the failure to implement the Sungai Sibiew riverbed project, as the main reason why. Tiong added that he has been pushing for the execution of the Sungai Sibiew riverbed project for five years but to no avail. The project aims to deepen the river by at least 3-5 meters and widen to 100 meters to accommodate the increased rainfall due to climate change.

Labour matters

• New Minimum Wage: The new minimum wage of RM1,700, up from RM1,500 came into effect on Feb 1. This adjustment applies to employers with 5 or more employees, including those in professional sectors, regardless of staff size. For businesses with fewer than 5 employees, the new rate will take effect on Aug 1. About 4.37 mil workers stand to benefit from this increment - that’s an additional RM874 mil of additional salary, directly and indirectly, into the pockets of workers. Better living standards for these low-income workers, but be prepared for businesses to pass on these costs to consumers.

• Foreign Worker EPF: The government has proposed to implement a mandatory 2% EPF contribution rate on foreign workers by employers, PM Anwar announced. This rate was lower than the earlier proposed rate of 12%, after considering feedback from various chambers of commerce. A bill to amend the EPF Act 1991 will be tabled at the new Parliament session starting yesterday. Previously, foreign workers could opt to voluntarily contribute to EPF at 11%, whilst employers contribute a grand total of - RM5. This is a huge relief for employers who hire foreign workers, given the increase in minimum wage.

Interesting IPOs incoming
Before we start, let’s recap 2024 - Bursa Malaysia wrapped up 2024 with 55 IPOs (11 Main Market, 40 ACE Market, 4 LEAP Market), up 72% from 32 IPOs in 2023 - the highest number of listings in 19 years. Value-wise, RM7.42 bil in proceeds were raised, up 107% year-on-year and contributed to the total market cap (at IPO prices) of RM31.37 bil.

Here are 2 upcoming IPOs in the making:

• MMC Port Holdings: The nation’s largest port operator, has hired bankers for its RM6 bil+ IPO, according to sources. If materialised, this would be Malaysia’s largest IPO in more than a decade since private hospital operator IHH Healthcare’s USD2.1 bil listing in 2012, and would likely value MMC Port at RM25 bil. MMC Port operates 5 ports across the Malaysian peninsular, all along the Straits of Malacca. MMC Port is a wholly-owned unit of MMC Corp, a utilities and infrastructure group controlled by tycoon Syed Mokhtar Al-Bukhary.

• Aquawalk Group: The company, which owns and operates Aquaria KLCC, is seeking to list on the ACE Market, based on its filed prospectus, though targeted proceeds are not disclosed yet. Set for this year, this would be the region’s first oceanarium operator to go public. The company is controlled by Simon Foong, the husband of InNature Bhd’s (operator of The Body Shop Malaysia) managing director Datin Mina Cheah-Foong.

  Besides Aquaria KLCC, the company also owns and operates Aquaria Phuket, the biggest aquarium exhibit in Thailand, and a 40% stake in Jakarta Aquarium & Safari (JAQS) in Jakarta. It plans to open a new aquarium in Kota Kinabalu and Java, Indonesia.

  Little did we know, that housing and taking care of Nemo & friends is a wildly profitable business. In its financial year ended Dec 31, 2023 (FY23), revenue came in at RM95.82 mil (+33% yoy from RM71.9 mil un FY22) and net profit was RM33.83 mil (+32.5% yoy from RM25.54 mil). That’s a net margin of 35.3%! The company continued milking it in FY24.
  View its prospectus here.

Season of adults acting like kids - Parliament back to session
The 15th Parliament of Malaysia is back for its official fourth session. This setting will run from Feb 3 to Mar 6. Looking forward to some bit of productive news, and a lot more drama and shouting. Ain’t a Malaysian Parliament without the name-calling.

On a more serious note, the Public Accounts Committee (PAC) is jumping back into action. Always looking forward to the dirt they can dig out. The PAC is the watchdog over the government, primarily on how it spends its money. PAC chairperson Mas Ermieyati Samsudin said its reports will cover high-profile issues, including the multibillion-ringgit free-flow toll system, the procurement of Foreign Workers Centralised Management System and rural water supply problems in East Malaysia. There will be 5 new proceedings, with 2 juicy issues - the delisting of Malaysia Airport Holdings Bhd (MAHB), the delay in the resumption of aerotrain services, amongst the airport management issues and the rising cost of health insurance premiums.

4. AROUND THE WORLD 🌎

Today’s global focus: Trade war and AI

Trump's Trade War Season II Is Here

Dollar Surges, Markets Tumble
As US President Trump launched the opening volleys of his multi-front trade war, the US dollar saw broad gains as it pushed numerous other currencies down. The Canadian dollar, the Mexican peso, and the euro all slid to multi-year lows, with the Swiss franc also dipping to its weakest since May while the Chinese yuan was hit as well. Trump is already pushing trade law boundaries to justify 25% tariffs on Canadian and Mexican imports and 10% additional duty on Chinese goods by issuing them as part of a “national emergency”, citing fentanyl and illegal immigration as “extraordinary threats”.

China: Back to Phase 1?
China has denounced the tariff, stating that the fentanyl issue is “America’s problem”. Beijing also plans to challenge the tariff at the World Trade Organization while taking unspecified “countermeasures” according to China’s finance and commerce ministries. Still, China has left room open for talks. Sources reported a plan to restore the tariffs to the “Phase 1” trade deal signed with Trump during his first presidential term in 2020. The plan also includes a pledge to not devalue the yuan, to make more investments in the US, and a commitment to reduce exports of fentanyl precursors.

Canada Returns Fire
Long-time trade ally (and also neighbour) Canada has returned fire immediately, with PM Trudeau announcing retaliatory 25% tariffs on USD107 bil of US goods while encouraging Canadians to buy local, a sentiment echoed by local officials. Canada also plans to take legal action against the US for the tariffs, calling them “illegal and unjustified”, violating the trade agreements between the two countries. Canadians have also responded by cancelling trips to the US and boycotting US alcohol, among other things. However, this may not prove to be the easiest task, considering how Canada leans towards raw input production rather than final consumer goods processing. Here’s an interesting little skit showing how much this national pride can cost Canadians, considering just how much the two countries trade. Also, here’s a rather graphic image of just how the Canadian tariffs can backfire on Trump.

Mexico Vows Retaliation
South of the US border, Mexico (another neighbour) has also taken immediate retaliatory action, with President Sheinbaum stating Mexico has been forced to “respond in kind”. This involves tariff and non-tariff measures in defence of Mexico’s interests, though there were no specific goods mentioned. It should be noted that the US has been Mexico’s most important foreign market, with Mexico also the top destination for US exports as the two countries trade oil, gas, fuels, and farm produce. Sheinbaum has also rejected Trump’s allegation that the drug cartels were allied with the Mexican government as slander. The allegation was a point that Trump used to justify the tariffs.

On The EU Side
European leaders have warned that a trade war between the US and the EU would only harm consumers on both sides, with the EU foreign policy chief stating that a trade war would leave China as the one “laughing on the side”. As it stands, the members of the EU are preparing possible responses to Trump’s threat, but are waiting on his next move, stating that the aim is to avoid pouring fuel on the fire. Still, while Trump thinks the EU is “really out of line”, he believes that something can be “worked out” regarding whether or not Britain would avoid tariffs. As an aside, the Danish Prime Minister has reiterated that Greenland is not for sale, following the revelation that Trump’s interest in acquiring the place is “not a joke”.

What About The Americans?
Trump has assured Americans that while the tariffs will cause pain, they will be “short-term”, compared to how the US has been “ripped off by virtually every country in the world”. Companies with locations in North America are already bracing for incoming challenges, with several automakers potentially shifting production to foreign facilities, while smaller businesses fret over how it is now more costly to bring in foreign parts. Still, a poll has shown that Americans are more bullish on the US economy guided by Trump, even more than during Trump’s first presidential term, with about half of the respondents expecting growth in the next six months, while 61% predicted stocks rising. Let’s see whether they still think so after prices go up on a few of their favourite things.

AI 

• Softbank's Son announces Japan AI JV with OpenAI

  Masayoshi Son, SoftBank’s CEO, has confirmed that SoftBank will be partnering with OpenAI to set up a joint venture in Japan, called SB OpenAI Japan, to offer AI services to corporate customers. SoftBank will also be paying OpenAI USD3 bil a year to use its technology across its entire group of companies. To date, SoftBank has committed USD15 bil to an OpenAI joint venture, Stargate, with plans to further invest another USD15 bil to USD25 bil in OpenAI itself.

• OpenAI's latest offering: a research analyst

  The ChatGPT parent is releasing a new AI tool designed to carry out time-consuming online research for users. This tool, called Deep Research, will be available to certain paying customers through ChatGPT and will go through words, images and PDFs online to create an in-depth report in response to a prompt. This also marks the second AI agent OpenAI has launched this year after it introduced Operator last month.

• UK leads the charge to criminalise AI child abuse tools

  The UK is set to become the first country to introduce laws that criminalise the possession, creation, or distribution of AI tools that generate sexualised images of children, with the crime punishable by up to five years in prison. Possessing AI “paedophile manuals” that teach people how to use AI to sexually abuse children will be punishable by up to three years. Predators who run websites facilitating paedophilic content will also face up to 10 years in prison.

5. FOR YOUR EYES 📺

1. Upcoming Netflix series - Squid Game, Stranger Things, Wednesday and many more. Check out the trailer Netflix made - taking trailer-making to the next level!

2. It’s CNY (aka self-permissible gambling season for the Chinese), so let’s talk about gaming. Selling picks and shovels to gold miners — meet RGB International Bhd, the Bursa-listed gaming company that sells casino gaming machines to casinos. They are the biggest gaming machine supplier in Asia with a 70% market share in this region.

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