MAS - Business strategy remains intact

By Sharen Kaur

LOW PRESSURE: MH370 incident will not dent MAS bid to restore profitability, says official

THE Malaysia Airlines flight MH370 incident will not put a dent in the carrier’s business strategy, says a company official.

 The official, who spoke on condition of anonymity, said the plan will remain intact until and unless it becomes necessary to adopt a new one.

“For now, the business strategy, which is churning out positive gains, will remain as it is,” the official said.

The airline’s business strategy is aimed at restoring profitability by significantly cutting capacity and focusing on its premium sectors.

Flight MH370, which carried 239 passengers, including 12 crew members, disappeared while flying over South China Sea on a flight from Kuala Lumpur to Beijing early on Saturday.

The incident weighed down on MAS’ share price on Bursa Malaysia in the morning session yesterday.

The counter, which closed at 25 sen last Friday, fell to 20.5 sen in morning trade but later rebounded to close one sen lower at 24 sen.

It was the most active stock on the local bourse with 385 million shares traded.

Meanwhile, analysts said MAS’ air flight safety procedures should not be blamed for the disappearance of flight MH370.

“The issue is more on airport security or unforeseen problems. I don’t see any reason why MAS might want to change its business strategy as a result of this incident,” says Mercury Securities
head of research Edmund Tham.

On the sharp movement in the airline’s share price yesterday, Tham expects it to be temporary and “the stock will rebound”.

“The lower share price is because of a drop in investors’ sentiment following the incident.

I believe investors may turn to other aviation stocks or other sectors for a while.

“The main issue is MAS’ profitability and not so much the missing plane. It is up to Khazanah (Nasional Bhd) on whether to prop up the price,” Tham told Business Times.

MAS stock dropped 19 per cent when it announced a fourth-quarter net loss of RM342 million for fiscal year 2013 on February 18.

HwangDBS Vickers Research has maintained a “fully valued” recommendation on MAS’ shares, with a target price of 27 sen a share.

Hong Leong Investment Bank (HLIB) Research said it expects minimal expenses to be borne by MAS over the MH370 incident and any compensation would likely be covered by insurance, as
with previous cases.

On the airline’s share price performance, HLIB expects selldown pressure in the immediate term.

The research firm maintained a “sell” call on the counter with a revised target price of 20 sen from 25 sen previously.

Winnie Chiu - Forbes Asia’s 2014: Asia’s Power Businesswomen: 12 to Watch List!

By Sharen Kaur

  Winnie Chiu, president and executive director of Dorsett Hospitality International has been listed Forbes Asia’s 2014: Asia’s Power Businesswomen: 12 to Watch List.
  This is a prestigious recognition and Winnie is one of only two businesswomen from Hong Kong to be named on the list.
  Winnie took over the leadership of Dorsett Hospitality International in November 2011 and since then the Group continues to grow rapidly.
  The Group currently have 30 hotels in China, Hong Kong, Malaysia, Singapore and London including ten in the pipeline.

                                                                  Winnie Chiu

  The 515-room Dorsett Tsuen Wan, Hong Kong just began operation, to be followed by Lushan Resort, China; Silka Cheras, Kuala Lumpur and Dorsett Shepherds Bush, London in the next couple of months.
  By 2015, the Group will have well over 9,000 rooms in its inventory with a presence stretching from Asia to Europe.
  Winnie has over 12 years of experience covering various aspects of finance, hospitality industry, property development and retail management.
  She worked at Far East Consortium International Limited in 2005 and was instrumental in the IPO of Dorsett Hospitality listed on the Hong Kong Stock Exchange in October 2010.
  She has led the Group to consistently deliver strong financial results both for the shareholders and stakeholders; and the Group’s track record of proven success is reflected in the numerous accolades received including but not limited to; two-time winner of the Hong Kong’s Most Valuable Company Award accorded by Mediazone; Winner of the Best Small Cap Company Award by Asiamoney and Outstanding High-Growth Company (Hotel) 2011 accorded by Quamnet.com
  “It is the people that make the difference. I am constantly inspired and driven by my colleagues; and the Senior Management team around me. Their determination, dedication and loyalty are my source of motivation.  Their energy and passion is just contagious,” said Winnie.

US$80m to redevelop Terminal 2 in Subang

By Sharen Kaur

TERMINAL 2 at Sultan Abdul Aziz Shah Airport in Subang, Selangor, will be redeveloped for about US$80 million (RM261.2 million) this year to accommodate growth in turboprop operations, sources said.

The redevelopment is an expansion of the SkyPark Terminal (formerly known as Terminal 3), which has eight parking bays and five remote parking spots.

"The airport apron is shared by several operators and is running about 40 per cent beyond capacity, with some planes double parking. It is crucial to redevelop Terminal 2 and cater for additional requirements," said a source.

Terminal 2 has been sitting idle since 1998 when the Kuala Lumpur International Airport in Sepang started operations.

The redevelopment will be undertaken by Subang SkyPark Sdn Bhd (SSSB).

SSSB won a 59-year concession from Malaysia Airports Holdings Bhd (MAHB) to redevelop Terminal 2 and 3 in 2008 for about RM300 million. The deal included building five hangers for RM100 million.

"SSSB is awaiting approvals from MAHB. It is targeting to start redeveloping Terminal 2 in the third or fourth quarter of this year," said a source.

According to the source, SSSB will spend around US$50 million to construct a new terminal building with a floor space of 300,000 to 400,000 sq ft, as well as retail and commercial facilities.

He said the airport apron, with more than 20 aircraft bays, will be built by MAHB for between US$25 million and US$30 million.

MAHB has demolished the Eurocopter Malaysia facility at Terminal 2 to make way for the apron. Eurocopter Malaysia moved to a new facility opposite SkyPark Terminal about 10 months ago.

When the redevelopment is completed in 2016, both SkyPark Terminal and Terminal 2 will have a combined passenger handling capacity of five million.

SkyPark Terminal houses the operations of Firefly, Malindo Air, Berjaya Air, VistaJet and Westair.

According to the MAHB website, aircraft movement at SkyPark Terminal had grown by 16.3 per cent to 74,008 in 2012 from 63,616 in 2010, the first year it started operations.

The number of passengers handled by the terminal had surpassed its one-million capacity.

The source said Firefly and Malindo Air, which operate 14 and five turboprops, respectively, are expanding their fleet to 17 and 13, respectively, by the end of this year.