18/03/2025

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TUESDAY | MAR 18, 2025

Analysts bullish on local tech sector earnings

M’sian developers make presence felt in Australia

KUALA LUMPUR: The government is moving from supporting micro business to scaling up SMEs into mid sized enterprises this year to create more businesses that can compete globally. Entrepreneurs Development and Cooperatives Minister Datuk Ewon Benedick said the move will be backed by grants, financing and digitalisation programmes. “This year, the government is focused on scaling up SMEs into mid sized enterprises, particularly those with the potential for growth. We will support them through existing and new schemes provided by the ministry and its agencies,”he told reporters after officiating the TikTok Shop Live Hub x Tekun Nasional launch yesterday. Ewon said the goal is to create globally competitive businesses that can contribute more to gross KUALA LUMPUR: Malaysia’s technology sector earnings are projected to grow this year, riding on stronger demand and overall recovery in the semiconductor space amid US tariff headwinds, said analysts. In a research note yesterday, RHB Investment Bank Bhd (RHB IB) expects earnings in the country’s technology sector to grow this year on stronger demand, with potential upside in the immediate term due to urgent order deliveries ahead of the impending US tariffs. “We expect earnings to surge by 37.2% year-on-year (y-o-y) in 2025, as we anticipate a stronger year from a recovery in the semiconductor space,” it said. In the fourth quarter of 2024, RHB IB said, results were mostly below expect ations, with four of the nine companies under its coverage missing estimates, mainly due to margin compression despite overall revenue growth and higher loadings. RHB IB anticipates first-quarter 2025 earnings growth to be flattish to slightly higher quarter-on-quarter, supported by a stronger US dollar against the ringgit and stable loading factors, despite the seasonal weakness of the first quarter. Meanwhile, CIMB Securities Sdn Bhd expects 16% sector net profit growth this year, down from its previous estimate of 25%. It said this is due to lower growth across all three sub-segments, namely, automated test equipment, outsourced semiconductor assembly and test, and electronics manufacturing services, de spite a broader semiconductor industry recovery and inventory replenishment. “However, demand recovery remains uncertain owing to weakening consumer sentiment amid escalating global econ omic uncertainties, further exacerbated by the introduction of new tariffs and the risk of recession in the US. “As a result, downside risks to our sector earnings growth forecast persist,” CIMB Securities said. – Bernama Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

KUALA LUMPUR: Top-tier Malaysian property developers are leading Australia’s largest urban renewal projects, while Malaysia is still debating the crucial Urban Renewal Act (URA) amid deter iorating low-cost housing, said Minister of Housing and Local Government, Nga Kor Ming. Set to be tabled in Parliament in July, the URA has sparked heated debate among property developers and homeowners, with key con cerns revolving around the per centage of Bumiputera ownership and the “en bloc” sale of strata developments, which has raised fears of potential displacement, particularly among lower-income houseowners. Nga highlighted that Malaysian property developers such as SP Setia Bhd and Gamuda Bhd’s property arm, Gamuda Land, are playing a significant role in Australia’s urban renewal efforts. Gamuda Land has invested US$2.8 billion (RM12.4 billion) in urban redevelopment projects in Mel bourne, contributing substantially to Australia’s housing and infra structure growth. “Ironically, while these Malaysian firms are transforming foreign cities, similar efforts in their home country remain sluggish,” he said in a press conference held in conjunction with the three-day Asia Real Estate Leaders (AREL) Study Tour to Mel bourne recently. AREL brought together over 180 key stakeholders from Australia and Malaysia’s housing and real estate sectors. The event was organised by

largest and most significant mixed use developments. With over 1,400 apartments and 10,000 square metres of retail space, it stands as a testament to the expertise of Malaysian developers in delivering world-class projects,” he said. Back home, the Town and Country Planning Department and Kuala Lumpur City Hall have identified 534 areas suitable for urban renewal, covering four key aspects: redevelopment, regeneration, rejuvenation and preservation. “Malaysia has hundreds of ageing buildings, many of which were built before Merdeka. Based on con sultation with the Fire and Rescue Department of Malaysia, many of these structures, particularly old flats and public housing schemes, have a lifespan of about 70 to 80 years. “Deteriorating wiring systems, fire hazards, and poor living conditions pose serious risks to residents,” Nga stressed. To emphasise the urgency of urban renewal, the ministry plans to launch a nationwide road tour, inviting members of parliament to visit dilapidated sites requiring immediate redevelopment alongside successful renewal projects. One of the most contentious issues surrounding the URA is the consent threshold, with critics arguing that it may marginalise the Malay communities and the bottom 40% (B40) and middle 40% (M40) income groups in urban areas. Nga clarified that the proposed URA will require 80% approval for urban renewal projects, aligning with Singapore’s standard. In com parison, Melbourne has a 75% threshold for strata properties, while Tokyo and Shanghai require a two-thirds majority. “Malaysia’s URA is more embracing compared to the other countries as it even covers aban doned projects. In such cases, the government plans to lower the consent threshold to 51% to expedite redevelopment as some developers have fled, and in certain instances, you can’t even find who the owner is,” he said. Commenting on the developers abroad, Nga said the government has called on major institutional investors to reallocate at least 70% of their investment portfolio back to Malaysia to stimulate domestic investment. “Permodalan Nasional Bhd is a shareholder of SP Setia, and we have urged it to scale back overseas projects and focus more on domestic redevelopment efforts. “The goal is to create greater demand for the ringgit and strengthen the economy by ensuring Malaysian developers prioritise local projects,” he added. – Bernama

o However, at home, reform stalls amid heated debate over proposed Urban Renewal Act

The Town and Country Planning Department and Kuala Lumpur City Hall have identified 534 areas suitable for urban renewal. Picture for illustration purposes only. – BERNAMAPIC

the Real Estate and Housing Developers’ Association Malaysia Institute and Monash University. The study trip aimed to provide Malaysian developers with the opportunity to engage with leading Australian experts in areas such as mixed-use developments, retire ment villages, sustainable develop ment, social housing, and urban townships. For context, Gamuda Land is developing The Canopy on Normanby, located in an up-and coming precinct within Fishermans Bend, which is Australia’s largest

urban renewal project, covering about 480 hectares. Meanwhile, SP Setia has been actively involved in urban re development projects in Australia, particularly in Melbourne, with Sapphire by the Gardens set to become a landmark in the city. Nga said Malaysian developers such as Gamuda, SP Setia, Sime Darby and OSK have successfully established a presence in Melbourne and other Australian cities. “OSK’s Melbourne Square development, valued at A$2 billion (RM5.6 billion), is one of the city’s

Govt to focus on scaling up SMEs into mid-sized enterprises

domestic product and job creation. “We will offer matching grants and financing to help businesses automate operations, acquire new machinery, digitise processes, and comply with international standards, such as adapting to ESG (environmental, social and governance) principles, so that their products and services can com pete globally.” He expressed hope that Malaysia will see a rise in mid-sized enterprises in the coming years. “We are currently finalising plans to launch four more hubs and aim to roll them out this year. There is strong demand for expansion, and the ministry, through Tekun Nasional, will continue discussions.” Ewon said the ministry operates its own online sales platform, MyMall, to provide entrepreneurs with more digital sales channels. “The more digital platforms our entrepreneurs can leverage, the better.” The second TikTok Shop Live Hub

was launched at the Tekun Nasional headquarters. The initiative is a colla boration between TikTok Shop and Tekun Nasional aimed at empowering local entrepreneurs through an e commerce ecosystem. The launch was a step forward in helping local SMEs expand into larger markets by leveraging digital marketing. As part of its long-term commit ment, TikTok Shop has announced an investment of nearly RM3 million to develop and operate TikTok Shop Live Hubs across Malaysia. This commitment is realised with the opening of the first hub in Kuala Lumpur to provide digital platform access to entrepreneurs. Ewon said the initiative is a step in driving the development of Malaysia’s e-commerce ecosystem, particularly in Kuala Lumpur. “The TikTok Shop Live Hub will be a catalyst for local digital business growth, creating more opportunities for SMEs and providing an innovative

space for local content creators.” Since 2024, he said, TikTok Shop has partnered with Tekun Nasional to train over 100 sellers in Selangor, helping them generate more than RM2.3 million in sales and achieve a 300% increase in orders. “I have been informed that this partnership aims to establish 12 Live Hub Studios in six states – Sabah, Kuala Lumpur, Penang, Johor, Kelantan and Sarawak.” TikTok Shop Malaysia strategic partnerships director Nur Azre Abdul Aziz said that beyond its financial solutions partnership with Tekun Nasional, the TikTok Shop Live Hub will also help bridge the digital participation gap for local entre preneurs, enabling them to build brands and communities. “We aim to drive inclusive digital economic growth, create new job opportunities, and open alternative income streams for Malaysians, parti cularly SMEs,” she added.