Significant Event

• Malaysia furniture makers have been facing a shortage of rubber wood, an important raw material used to produce durable fixtures. Muar Furniture Association urged the government to intervene by limiting the export of rubber wood to prioritise local manufacturers.
• Rural residents, who account for roughly half of the 1.4 billion Chinese population based on their permanent residence registration, or hukou, would have basically no restrictions from the originally rigid system if they want to relocate to cities with populations of fewer than 5 million people.

Real Estate Industry 

• Talam Transform Bhd, an asset-rich property development company, is beginning to unlock the value of its landbank following the demise of its founder two months ago. The company is trading at a valuation of 0.4x Price to Book ratio currently.
• Sunway Malls commenced the construction of Sunway Ipoh Mall. Sunway Ipoh Mall will be developed on an 18.88-acre parcel and will span over one million sq ft of net lettable area (NLA) across four storeys. The mall will comprise 350 retail lots and 3,000 carpark bays.

Infrastructure/Logistics

• Sarawak Petchem’s Rm7 Billion Methanol Complex has commenced operation. The project has an annual production capacity of 1.75 million metric tonnes.
• Celcom Digi had submitted its proposal for the deployment of Malaysia’s second 5G network to the industry regulator Malaysian Communications and Multimedia Commission (MCMC).

Company Expansion Plan/ Capex Plan

• Berjaya Food, the operator of Starbucks Malaysia, has secured the rights to operate Starbucks stores in Iceland, Denmark and Finland.

Berjaya Food has experienced a significant decline in its share price, dropping from RM 1.10 to RM 0.50 per share, largely due to a customer boycott over its parent company's support of Israel in the Israel-Palestine conflict. In a recent conversation with a Starbucks store manager, we learned that over the past 12 months, the company encouraged many of its higher-salaried staff to leave, but is now rehiring at a lower cost. Previously, Starbucks had ceased providing drink vouchers to staff, but they have recently resumed this practice. This suggests that the worst may be over for Starbucks. Observations of Starbucks and McDonald's outlets in city areas indicate that the boycott movement appears to have subsided. However, this is just an observation, not a recommendation to buy.