Comeback of Yong Tai Berhad?

Author: Danielheng847   |   Latest post: Mon, 14 Oct 2019, 5:15 PM


Comeback of Yong Tai

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Yong Tai has completed its kitchen-sinking exercise in FY2019 (ended 30 Juny 2019), with a net loss of RM79.3 million, on the back of RM100 million revenue.

There was a one-off impairment loss on inventories and receivables totalling RM73 million, this is related to their Terra Square and long outstanding receivables arising from the disposal of their old business.

A delve into their financial results shows that In FY2019, there was no revenue recognition from Terra Square retail mall, as compared to RM58 million revenue recognition in FY2018. To compare apple to apple, the revenue in FY2018 should be viewed as RM72.0 million, and strengthened by 38.9% y-o-y to RM100.4 million in FY2019. Higher revenue recognised in FY2019 without Terra Square retail mall was mainly contributed by the other property projects i.e. The Apple, Amber Cove, The Dawn and Impression U-Thant. This is a commendable sales performance given the current soft sentiment.


Anything new in Budget 2020?

  • The Government is targeting for 30 millon tourists arrival in Visit Malaysia 2020, with a total of RM1.1 billion allocated to the Tourism, Arts and Culture Ministry
  • https://www.thestar.com.my/news/nation/2019/10/13/30-million-tourist-arrivals-for-vm2020-can-be-easily-achieved-says-ministry
  • "50% of tourism tax to respective state governments to support their efforts in conjunction with Visit Malaysia 2020"
  • Companies which support arts and cultural activities will be given tax incentives in the form of income tax exemption - benefiting yong tai?
  • One of the setbacks for Yong Ta is is the dropped in Chinese tourists after the changed of government, this situation is expected to change in 2020
Cruise terminal
  • Currently, there are 2 cruise liners dock in Melaka every week, carrying about 3,000 passengers per ship
  • market talks are that Yong Tai is very near in getting the approval to build and manage a cruise terminal at its impression city. The cruise terminal will have a direct link to its terra square mall, thereafter will be able to increase the passenger traffic substantially. 


Terra square

  • Terra Square is a mixed development within the 138-acre Impression City in Melaka. It is positioned next to the Encore Melaka theatre and is designed as a point of commerce and tourism. With over 962,923 sq ft of nett leasable floor space, Terra Square will feature shoplots, linear mall, sports mall, aquarium as well as a four-star hotel on 14.6 acres of land.


All in, i belive Yong Tai is in the right path - they are unlocking the value of their theatre through the proposed disposal of its 70% stake in the theatre to HRC World. thereafter they will have the fund to complete the construction of terra square + cruise terminal (funding TBC) to increase the passenger traffic. With that, Yong Tai will have a higher command power to entice more traffic flow to their theatre.

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