YTL Corp

YTL Corp armed with rm14 billion net cash is unfazed by the new pricing regime that encourages the first generation IPPs to lower their power tariffs. It can live with in a regime without PPA. To recap, TNB and five IPPs would need to offer a reduction in commercial rates to the government, paving the way for a more competitive pricing regime in the industry. The government had called for TNB and five IPPs to participate in a bidding exercise that will close end July 2012 for an extension of their PPAs. However only half of that power pacts that will expire in five years will be extended, putting spotlight on YTL Power Generation Sdn Bhd. YTL is the only IPP that has a take or pay clause in its PPA, which obliges TNB to buy the power it produces whether or not the national utility firm requires the capacity.

It has cash to undertake mergers and acquisitions in assets and in various silos of businesses. The group has started identifying assets to acquire, particularly in the hospitality and retail segments. It is now seeing some deals coming through after 2008.

The group derives 85% of its revenue and profit from overseas which are mostly regulated, is investing a lot in its 4G infra, hotels, properties, and the ERL which connects KLIA and KL Sentral. Its ERL will be benefited when the new LCCT links up with the ERL services in 2013.

SKPetro

It is spending about US$1.5 billion over the next three years (2012 & Beyond), a move may deemed pivotal to expand the oil and gas support services provider’s geographical presence. The capex to be financed via bank loans will fund the group’s projects involving drilling rigs and pipe laying vessels.

It is using Brazil as its beachhead to venture into West Africa . It had cash of rm2.11 billion as at Jan 31, 2012 versus debt obligations of rm4.5 billion, translating into a net debt of rm2.39 billion.

The company intends to bid for up to rm12 billion worth of projects by end 2012 in Brazil , Australia and Malaysia . Its current order stood at rm13.5 billion, the value of which depletes by some US$1 billion a year.

The company does not have a dividend policy and any proposed payouts will hinge on its capex, cash and debt levels, apart from its retained earnings.

The listing of SKPetro’s listing on Bursa will not raise funds from the issuance of 5 billion new shares as they constituted the payment for the acquisition of businesses in SapCrest and Kencana from shareholders of both firms.

SapCrest and Kencana, whose shares will be delisted, have become wholly owned subsidiaries of SapuraKencana.

The stock price will likely be supported by positive news flow even though the earnings impact from new contracts will likely still be two to three years away.

It is worth noting that SKPetro’s plan to derive cost and revenue synergies from the merger. It has now has a competitive edge in securing larger and more cmplex EPCIC projects both locally and internationally.

Sanbumi/Permaju

In Dec 2011, Permaju’s major shareholder Datuk Chua Tiong Moon has been building up a sizeable stake leading to speculation that this may lead to an alliance between the two companies. Both Sanbumi and Permaju share a common business interest in timber and both companies are loss-making;

In Sept 2010, GM is conducting a review of its operations and business in Malaysia and in the centre of talks is the business relationship with DRB-HICOM via HICOM-Chevrolet Sdn Bhd. One report indicated a decision might have been made with current Chevy 3S dealer Cergazam Sdn Bhd, a company owned by timber company Permaju Industries Bhd, with Cergazam taking over distribution operations until a full-time partner could be found;

· In Jan 2009, loss-making Permaju Industries Bhd’s diversification into the retail car market in 2007 after the cessation of its timber-related business.The Sabah-based company’s diversification includes distribution of vehicles and providing related services under its unit Cergazam Sdn Bhd, which was appointed an authorised retailer for Chevrolet vehicles

Dated Dec 2011

Permaju’s major shareholder has been building up a sizeable stake leading to speculation that this may lead to an alliance between the two companies. Both Sanbumi and Permaju share a common business interest in timber and both companies are loss-making.

On Nov 29 2011, Sanbumi managing director Datuk Chua Tiong Moon bought an additional 3.63 million shares in Permaju at 29 sen a piece for RM1.05 million in a married deal. This brought his total shareholdings to 12.99 million shares or a 6.91% stake in Permaju, making him the third largest shareholder behind brothers Tan Sri Chai Kin Kong and Datuk Chai Kin Loong, who have 10.95% and 7.35% direct stakes in the company respectively.

On Nov 30 2011, 4.5 million Permaju shares were exchanged in an off-market cross trade at the same price of 29 sen. These shares were sold by Kin Kong, Kin Loong and other family members. Permaju’s biggest shareholder Kin Kong had reduced his stake from 13.7% on April 22 to 10.94%, and on Sept 28 2011 selling most of the 7.64 million shares in the open market. Kin Kong also disposed of 2.9 million Sanbumi shares, reducing his stake to 4.99% with a total of 8.694 million shares.

It appears that Chua has been building up his stake in Permaju, possibly buying up the Chai brothers’ shares. It is unclear what Chua’s motive is, although there could be a synergy between the two companies’ timber businesses.

Permaju and Sanbumi have a market capitalisation of RM58.78 million and RM47.31 million respectively.

Permaju has two core businesses in timber and automotive. While Permaju’s timber segment accounted for a majority of the group’s assets, its automotive division contributed almost 10 times the revenue compared with timber.

Permaju’s timber business which has 59.41% of the group’s assets at RM140.84 million only contributed RM14.09 million in revenue or 8.94% of their full-year revenue ended Dec 31, 2010. The timber segment incurred a loss of RM5.35 million overall.

Its automotive segment which contributed 90.98% of its 2010 revenue, accounted for 46.44% of the group’s total assets in the same period.
Permaju executive chairman Datuk Rahadian Mahmud Mohammad Khalil said that the group’s timber log trading activity is to be further rationalised and to cease if the trading environment remains unhealthy.

Permaju has RM16.96 million worth of timber concession rights in Pahang and Kelantan and Sanbumi’s principal activities through its subsidiaries are saw milling, manufacture of downstream timber products, timber log and timber product trading.

For the group’s 3Q results ended Sept 30, Permaju incurred losses of RM5.02 million, with its timber business offering weak revenue return to assets.

The timber business which has RM123.24 million in assets or 53.54% of the group’s total assets only contributed RM4.75 million in revenue or 3.72% of the group’s total for the quarter and incurred an overall loss of RM276,000.

In the same quarter, Permaju’s automotive segment with RM114.06 million in assets (49.54% of total assets) contributed RM122.66 million to the group’s top line or 96.19% of total revenue with a loss of RM2.26 million.

Sanbumi chalked up net losses of RM5.24 million for the nine months to Sept 30.

Dated September 2009 …

DRB-HICOM Bhd has made a pitch to GM about jointly conducting completely-knocked-down (CKD) operations in the country.

Market sources said the prospects of doing local assembly for GM would be beneficial to future sales as locally assembled cars would be cheaper.

GM is conducting a review of its operations and business in Malaysia and in the centre of talks is the business relationship with DRB-HICOM via HICOM-Chevrolet Sdn Bhd.

One report indicated a decision might have been made with current Chevy 3S dealer Cergazam Sdn Bhd, a company owned by timber company Permaju Industries Bhd, with Cergazam taking over distribution operations until a full-time partner could be found.

The seeming breakdown in the relationship between GM and DRB-HICOM is somewhat puzzling as the latter has had a long and fruitful relationship with other vehicle manufacturers in the country.

Dated Jan 2009

Loss-making Permaju Industries Bhd’s diversification into the retail car market in 2007 after the cessation of its timber-related business.

The Sabah-based company’s diversification includes distribution of vehicles and providing related services under its unit Cergazam Sdn Bhd, which was appointed an authorised retailer for Chevrolet vehicles.

The retailer agreements, which are renewed annually, will expire on Dec 31 2009.

However, Chevrolet retains the rights to sell vehicles directly or indirectly in Malaysia and appoint retailers in the country.

Cergazam has showrooms in Petaling Jaya, Bukit Mertajam, Johor Baru and George Town . On Aug 25 2008, Permaju approved RM40mil to Cergazam and TP Auto Sdn Bhd, which sells imported used luxury cars.

The proposed diversification is expected to incur losses of about RM2mil for the financial year ended Dec 31 (FY08) mainly due to it being its first year in operations and lower sales forecast resulting from the unfavourable economic condition and volatile oil prices.

The company acknowledges it may face direct competition from new and existing players in the industry and price competition.

It has targeted for motor vehicle distribution and related services to contribute 25% of more of the net profit for FY10.

Financial Results …

Permaju posted net loss of RM941,000 in the nine months ended Sept 30. For FY07 its net loss was RM37.06mil due to lower sales of logs and provision for impairment loss on property, plant and equipment of RM19.08mil. This is a sharp contrast to the net profit of RM16.67mil in 2006.

Tanco … dated May 2012

There is finally light at the end of the tunnel for Tanco and its Lehman Loan.

The company had secured banking facilities amounting to rm77 million from Bank Kerjasama Rakyat Malaysia Bhd. It will use the money to settle the rm24 million it still owes to Lehman Brothers.

Recall that Tanco’s loan from Lehman had ballooned to rm300 million. It was engaged in a legal battle with Lehman Brothers for years over the loan in 2007 and finally agreed on a settlement of rm144.6 million in 2011.

The settlement involves the payment of rm44 million cash and the transfer and veting of certain properties at an agreed value of rm100.63 million.

Once the settlement is completed, Tanco will gain access to the other properties that have been locked by the lengthy litigation process. Then it could focus on moving forward.

For FY2011 ended June, some rm260 million worth of assets – freehold land with a net book value of rm105.8 million, a golf course, resort properties amd buildings, among others – were charged to Lehman to secure the borrowings and would be discharged upon completion of the settlement.

This is expected to have a positive impact on the net assets of the group. The estimated positive impact is a result of net exceptional gain of about rm131 million before taxation arising mainly from the waiver of the remaining secured debt, pursuant to the settlement scheme.

The net exceptional gain would bump up its net earnings per share by 39 sen. Its net assets per share would also increase from 52 sen to 91 sen while gearing would be reduced from 1.83 times to 0.11 times.

Part of the rm77 million obtained would be used to finance the working capital requirements and construction cost for a proposed mixed use development in Palm Springs Resorts City .

DIGI

It is piling up cash faster than it can return it to shareholders. The mobile operator has paid dividends exceeding annual net profit in the past five consecutive years. Even so, it is still flush with cash and remains far from its optimal capital structure.

Digi has previously indicated that it would like to have 35% to 45% net borrowings on its balance sheet, which is equivalent to gearing of roughly 54% to 81%. However, as at end 2011 it had gross cash totaling rm1.52 billion and net cash of rm439 million. As such, expect the company will continue to pay out all of its earnings, at least, for the foreseeable future.

Limited by the amount of retained earnings in its balance sheet for the payment of dividends, DIGI proposed a second capital management initiative in April 2012 that will seek to refund rm495 million to shareholders. This comes hot on the heels of the first capital management exercise to distribute rm509 million announced in Sept 2011. It is currently in the process of implementing the first capital repayment and expects to disburse the second, which is pending regulatory approvals, at the latest by 1QFY2013.

Its depreciation is estimated to total some rm500 million to rm550 million for the full year but will taper off to less than rm100 million in 2013. Once the assets are fully written off, net profit will spike sharply higher.

MEGB

It is likely to reward its shareholders with a bumper dividend from the balance of its unutilized funds raised from its IPO in 2010.

The comes as the education group sees a change in strategy following a drop in its student numbers due to intense competition and issues related to the PTPTN.

From its IPO, MEGB raised gross proceeds of rm147.86 million. At the time, a large sum was set aside to build a campus in Kajang, but as at Dec 31, 2011, it had only utilized RM70 million.

As at 4QFY2011 results, tm38.8 million was spent on the purchase of land to build the new campus, while rm20 million was spent on expanding its existing campuses. After stripping out, the listing expenses and working capital, there is about rm73.66 million remaining from the IPO proceeds.

Meanwhile, it is said that the education is not averse to selling the land it acquired to build the campus. After there is no need for a big campus anymore now.

The rm73.66 million coupled with the sale of land – should it happen – could bring in about rm112 million which can then be distributed to shareholders, which is about rm0.27 per share.

MEGB is facing a number of challengers: about 90% of it students rely on loans from PTPTN to finance their studies. The government has also decided to increase the minimum entry requirement for nursing courses and PTPTN became more stringent with its loan approvals because of poor repayments.

There has also been a shift in the industry, with fewer students pursuing diploma courses at private education institutions.

Expect high earnings risk for MEGB as the group tries to attract new students by diversifying into non health related programmes and post diploma courses.

It will work towards establishing a reputable foreign branch campus in Malaysia . It also plans to focus on degree programmes where there is higher demand and revenue orientation, instead of diploma programmes.

MEGB also said that the new PTPTN loan scheme had impacted its environment and earnings.

However, there is a silver lining for the education group. The ministry has been tough on granting licenses for the setting up of colleges. With that, MEGB’s licenses and business has a value.

Naim Holdings Bhd… dated April 2012

A well connected property and construction company in Sarawak , is in unfamilar territory. Its rm500 million debt papers is in question after RAM revised the long term rating of the group from stable to negative.

The reason is due to Naim’s declining financials.

Naim’s construction division had realised lower contract billings following delays caused by land issues bleak weather and design chanhes. The division also did not secure any notable new contracts in 2011. At the same time, the property division’s progress billings had declined due to delayed launches of new projects.

Its two largest shareholders are Datuk Hasmi who has a 22.86%s stake and Datuk Abdul Hamed who owns 16.06% stake. Datuk Abdul is a cousin of Sarawak Chief Minister Tan Sri Abdul Taib.

Naim has drawn down rm300 million of its rm500 million MTN facility. It is notable that Naim’s debt paper is at the holding company level, which means it does leave the company much room to gear up further.

As at end Dec 2011, Naim had cash and cash equivalent of rm214 million. On the other hand, the group had non current liabilities of rm340 million while short term borrowings of rm7.91 million.

Naim has to maintain an annual interest cover ratio of at least four times for the bond.

The company has property development and construction jobs on hand, but there have not been any new launches.

NAIM plans to incur hefty debt funded capex to acquire land and investment peoperty. This will result in increased gearing and weakening earnings.

RAM may revert NAIM back to stable if it is able to replenish its order book, sustain its uptrend in unbilled sales and demonstrate robust improvements in its business and financial profile. A review will be done in the next three months from May 2012.

Naim has tendered for rm2 billion worth of jobs while the company’s order book as at end Dec 2011, stood at rm686 million.

The jewel in Naim’s crown is its 33.63% stake in Dayang.

Considering Naim owns a controlling block, there will be premium if divested.

There is negative pledge on the bonds, which means any assets Naim may seek to sell will require the approval of the bondholders. This is to ensure the proceeds goes towards redemption of the debt paper.

But Naim is unlikely to divest its interest in Dayang because the latter is the main contributor to the group’s earnings. This means if Dayang’s earnings contribution is removed, Naim’s core net profit will be very small, so what will the company do in the following years without Dayang?

Naim has goof land assets in East Malaysia .

As for the company tie up with KPJ Healthcare Bhd, that will also take time to bear fruit.

MPHB

It is selling its insurance business. Tune Money is one of the parties interested in MPHB Insurans Bhd.

Going by the current valuations, MPHB is not going to be valued at anything less than 2.1 times book value. Based on a book value of rm220 million, the sale should gross MPHB more than rm440 million. This works out to be 30 sen per share.

What might put a dent in MPHB Insurans’ valuation is that it will likely lose a portion of its non motor business due to Tune Ins acquiring OCA. This is because some 16% of non motor insurance comes from Airasia travellers.

MPHB is slowly turning into a dividend yield stock largely due to the number forecast business it wholly owns through Magnum Corp. The reason MPHB is lagging bhind its peer in valuation is due to its debt position of more than rm1 billion. The debt was incurred when it acquired the 49% stake in Magnum Corp in June 2011.

Although its debt increased with the acquisition Magnum, MPHB also has assets.

Xian Leng… dated April 2012

Datuk Idris Abdullah surfaced as a shareholder in late April 2012 with a 5.38% stake.

Idris was formerly the chairman of KFM and executive chairman of Magnus Energy Group, in which Datuk Mohd Wira Dani Abdul Daim is a substantial shareholder with a 16.5% stake. Wira Dani is the son of former finance minister Tun Daim.

Considering the large block that was divested, there may be more shareholding changes in the pipeline.

Xian Leng’s former MD Ng and his wife Lim disclosed that they had disposed 23.88% stake and this leaves them with a 22.74% stake. It is not clear who acquired the shares from them. The shares were sold in three blocks on April 19 and 20 2012.

This development will have a bearing on an existing shareholder who is seeking two board seats in Xian Leng. Datuk Seri Chin the second largest shareholder seeking appointment of two seats on Xian Leng’s board. Chin holds 5.37% stake in the company.

Chin is the MD of KBB Resources Bhd, a company that made its name as a manufacturer and supplier of vermicelli. He has also involved in the construction and property development business in the 2000s. He is also involved in furniture manufacturing, the telcos business, corrugated cartoons and sheet boards.

He surfaced in Xian Leng in end Feb 2012 accumulating 3.65 million or 5.05%stake on the open market.

Xian Leng hogged the limelight in April 2012 when an audit revealed that rm86 million set aside to build ponds could not be accounted for.

Xian Leng has been recording losses for the past four years.

In the next few weeks, Chin will know if he is successful in his bid to appoint two nominees to the board.

Perdana Petroleum/Petra Perdana… dated April 2012

Sources say IPIC, a wholly owned by the government of the Emirate of Abu Dhabi, is said to be the strongest contender for the block of 57.7 million shares put up for sale.

Other parties interested in the stake is a Sawarak based family belived to be involved in the oil and gas and shipping business. It is well connected to the federal government and it is also known to the major shareholder of Petra Energy, which is Shorefield Resources.

Shorefield’s entry into Petra Energy was about rm1.91 per share. Petra Energy’s net assets per share stood at rm1.57 as at Dec 31, 2011. If Shorefield Resources’ entry price is used as a benchmark, it would be tough for sale to be conducted at the April 2012 price.

Shorefield would likely emerge as one of the potential suitors for Perdana's 26.9% stake in Petra Energy.

If Shorefield is successful in its bid for Perdana's entire remaining stake in Petra Energy, a general offer would be triggered. Shorefield already owns a 27.27% stake in Petra Energy. The company also owns 25% of Perdana. Perdana's proposal to sell its entire stake in Petra Energy would be instrumental in cleaning up its financial and operations, which would subsequently attract potential suitors.

It has to be more than the net assets per share and somewhere close to Shorefield Resources’ rm1.91 entry price.

The reason for Perdana Petroleum wanting to dispose of its shareholding in Petra Energy is due to the fact that it needs to monetize its assets to pare down borrowings. As at 31 Dec 2011, Perdana Petroleum had long term borrowings of rm175 million and short term borrowings stood at rm100 million. It also extended corporate guarantees to the tune of rm349 million to its subsidiaries and third parties. It has two bond payments of RM35mil each, due in September 2012 and March 2013, respectively.

Perdana Petroleum’s cash and cash equivalents stood at rm67 million.

It posted losses in its FY2011 ended 31. The losses incurred were mainly due to the fall in charter rates for oil and gas support vessels and the loss in revenue after Petra Energy became an associate following the 30% disposal to Shorefield Resources.

Perdana Petroleum Bhd's proposed divestment of its entire stake in Petra Energy Bhd will pave the way for the former to restructure its own financials and operations.

The stake sale will raise substantial cash for Perdana amd expect the company to use it to settle some outstanding loans, particularly those that will be due in the second half of 2012 to the early part of 2013.

Perdana Petroleum needs to monetize its assets to pare down some of its more pressing liabilities. Its cash flow has been dwindling ever since it disposed of 30% of its stake in Petra Energy in 2008.

Petra Energy is one of the few companies that offer immediate exposure to the big leagues in the oil and gas industry. It has existing contracts with Petronas and Shell and is bidding for more as a hook up and commission contractor. Also to be noted is that Perdana petroleum is unlikely to dispose of the stake at much lower than the rm1.91 per share that Shorefield Resources paid for.

Airasia/MAS… dated April 2012

Sources say the controversial share swap between Khazanah and Tune Air Sdn Bhd in respect of their partial shareholding in MAS and Airasia Bhd respectively is off. The move is seen as Putrajaya giving in to the pressure piled on by the unions at MAS.

But sources say the comprehensive collaboration framework that spells out the areas which the airlines would work together for their common benefit remains intact.

It is unclear how Khazanah and Tune Air plan to unwind their positions, especially when there is a possibility that a MGO offer could be triggered if the shares are distributed back to their original owners.

Another matter that is likely to be deliberated at MAS next board meeting is a proposal to issue rm3 billion worth of Islamic perpetual binds that will help bridge the gap for its rm6 billion capex requirement in 2012.

The question remains as to whether the collaboration between MAS and Airasia will be less meaningful if there is no share swap.

On the subject of MAS issuing a rm3 billion Islamic perpetual bond, sources say KWAP is poised to take up most of the paper. Although there are no details on the coupon rate.

This mans that MAS would have to fork out a substantial amount for the interest repayment annually. But it should not be an issue as long as the airline gets better returns from investing the proceeds.

If Genting Singapore ’s issuance is taken as a guide, the perpetual bonds will not have a maturity date and can be redeemed in whole, but at a date stipulated by the company.

As part debt, part equity, the holders of the perpetual bonds rank higher than the shareholders of the airline. If the perpetual bonds are convertible, the exercise will be dilutive to shareholders. The downside of the perpetual bonds is that they would be dilutive for existing shareholders and would impact MAS’s ability to pay dividends. But the airline has not been profitable, so the issue of shareholders losing out on dividends does not arise.

It will take a while for MAS’ largest shareholders, including Khazanah and the EPF, to enjoy any dividends from the airline.

Tune Air meanwhile will no longer be a shareholder with the unwinding of the share swap.

What is certain is that the rm3 billion fundraising will ease pressure on MAS’ cash pile of rm960 million as at Dec 31, 2011. It will also dismiss the possibility of a rights issue.

While MAS’ current cash pile of just less than the rm1 billion is enough to sustain it for four quarters, it is due to take delivery of 23 aircraft in 2012-2013.

Based on a catalogue price of rm640 million, this means MAS will have to come up with at least US$40 million for each A380 or about rm640 million for five A380s due for delivery in 2012.

In addition, MAS may have to fork out another rm415 million in cash to take up its RCPS due at end Oct 2012.

Market observers are concerned about MAS’ high gearing, with some estimating that the airline’s debt to equity ratio may even hit four times by 2013. If Genting SP’s issuance of perpetual bonds is taken as guidance, MAS’ geraing may be less than estimated.

In the case of Genting SP the perpetual bonds were structured to put less pressure on the company’s debt ratios. Even though the bonds are part debt in nature, from an accounting point of view, they can be treaded as 100% equity in Genting SP’s books.

Such an accounting treatment may work to the advantage of MAS, but it remains to be seen. MAS’ debt stood at rm5.67 billion as at Dec 31, 2011 of which close to RM3 billion is attributed to long term financing issue.

Although the rm3 billion perpetual bonds will give MAS some breathing space, all its not well at the ailing airline facing a hiccup in its BTP.

Furthermore, if there is a revamp of the MAS board following the unraveling of the share swap, it raises questions about the continuation of the airline’s business plan.

There are reasons why the CCF and the share swap were crafted in the first place; it was to stop the local airlines from fighting each other and to prepare them for the onslaught of competition when Asean implements the open-skies policy by 2015.

The carriers are getting prepared and are ahead of us by four or five steps while we are struggling. By unbundling the share swap we will be taking five steps backward.

The regional carriers were moving faster to position themselves ahead of 2015. Singapore Airlines (SIA) has both premium and low-cost airlines within its group to allow it to serve the low to high-end market. Thai Airways has done the same and Garuda is also getting there.

With the share swap, MAS could be the premium carrier and AirAsia, the low cost airline. Together they could have been a force to reckon with in the highly competitive environment. There are areas they could work together and compete at the same time.

The share swap and CCF were inked in August 2011.

Even if the share swap is called off, MAS and AirAsia will still need to work together as that is a global trend for airlines. Both may get into a memorandum of understanding (MoU) or a joint venture (JV) to work on areas that were identified in the CCF such as engineering, ground support, aircraft purchasing, cargo services and training. May be an MoU or JV is a better model given the objections to the share swap.

However, another source pointed out that “it would never be the same, as without a share swap there will be no economic alignment and the cooperation between the airlines will be limited”.

Any decision to unwind the share swap is not going to go down well for Malaysia Inc.

An unwinding of the share swap would mean AirAsia's Fernandes and Datuk Kamarudin Meranun may have to step down from the MAS board and also give up their 20% equity stake in the airline.

The AirAsia founding members were just trying to help to turn MAS around. AirAsia by itself is doing very well, so they could have done without a share swap.

An industry expert feels that MAS would continue to report losses if drastic steps are not taken to change the way things are done at the airline. MAS has to invest in short-term losses but it is for the long term gains. Cutting its workforce and network will not work as these are seen as quick shortcuts which will not resolve the problems the airline is facing.

For MAS to turn around, and for it to be able to compete with the likes of SIA, Cathay Pacific and Emirates, it has to get into the same frequency battle like other premium carriers. It needs to have the network breadth, its product has to be ahead of the curve and this includes having next-generation aircraft and all the latest fittings including real flat beds. It also needs to have a customer relationship management system so that it is able to serve its customers better.