Showing posts with label Saaya Irie. Show all posts
Showing posts with label Saaya Irie. Show all posts

Can Malaysia’s leaders emulate the Myanmar political reform?

by Koon Yew Yin


One of the leading papers in the region, The Nation recently conducted an interview with Burmese President Thein Sein’s chief political adviser, Ko Ko Hlaing. In that exclusive interview, Ko Ko Hlaing told the Bangkok paper that Myanmar’s political reform is “irreversible” because of the president’s strong will.
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He stressed that the specific constitutional provision towards democracy, the Burmese people’s taste of new found freedom, and the need for the country to follow the international trend ensured that the reforms would have to proceed.
In the interview, he also gave an insider’s glimpse into the thinking and philosophy of the former strongman who ran of Myanmar for close to 20 years. According to him, senior General Than Shwe, following his resignation as head of state in 2011, was not running the country from behind the scenes as commonly alleged and would not be making a comeback.


“As a Buddhist, you can understand the mentality of an elderly Buddhist. You should understand also the mind of an old soldier – which is always the desire to accomplish his mission. After the mission is accomplished, he can take a rest. 


“[Than Shwe] had undertaken the responsibilities of the state for a long time, and there were many hardships, pressures and difficulties… He also laid down the conditions of democratic reform – the seven-step roadmap. He is now enjoying his retirement with his grand children.”


What was also striking to me was the way that Ko Ko Hlaing responded to the question of whether the military strongman was afraid to be taken to trial by a civilian government.
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Ko Ko Hlaing said: “This is a Buddhist country. Forgiveness is our principle. Also, Aung San Suu Kyi and the other opposition leaders, young and old have talked about forgiving, and forgetting the past and trying to do the best for the nation.”  


It may be necessary for me to explain why I am focusing on the subject of Myanmar’s political reform road map.  In a few weeks on April 1, my own road map for Malaysia contained in my book ‘Malaysia: Road Map for Achieving Vision 2020’ will be launched in Ipoh. The book details can be viewed at the publisher’s website shortly.


At the time that I wrote my book I did not refer to it as the Burmese reform process was still evolving. I also did not understand the situation in Myanmar as I was an outsider with little contact with its system of government.
During the last few months, that situation has changed dramatically for me. 


Arising from several visits to the country and my involvement in a development-cum-philanthropic undertaking I am pursuing there, I have been in personal contact with some of Myanmar’s top leaders and have been impressed by the remarkable progress of their political reform process as compared with Malaysia’s.


Now that I also have the benefit of this remarkable interview to draw upon in addition to my own personal experience in interacting with Myanmar’s leaders, I would encourage all Malaysians – especially our political leaders, including Dr Mahathir Mohamad, the Prime Minister Najib Razak and the opposition leaders to read carefully the interview and distil from it the lessons that are necessary for our own political reform process to have any chance of success.
To sum up, some of the lessons from Myanmar for us to follow are:
·         Reform must come from both a top down as well as a bottom up process.
·         Old leaders should give up trying to retain power or maintain influence after leaving office.
·         The ruling party must abide by and not undermine the constitutional provisions to a democracy
·         Media freedom and the end to censorship need to be placed in the forefront of the political reform agenda.
·         Lastly and most importantly, the nation’s interests should come ahead of individual or group interest.
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In the Buddhist philosophy, the feeling of a separate ‘I’ which we call ego consciousness is directly related to the strength of ignorance, greed, and hatred.

The deepest meaning of ignorance is the believing in, identifying with and clinging to the ego, which is nothing but an illusionary mental phenomenon. But because of this strong clinging to ego-consciousness, attachment/desire, anger/hatred arise and repeatedly gain strength. 

This ego and self-interest manifested in the material greed and weakness of leaders needs to be conquered if our country is to survive well. 

Why I Like EPMB

EP Manufacturing Bhd (EPMB), an investment holding company, is an automotive parts manufacturer. The group operates through three segments: automotive, composite and water meters. The automotive and composite segments operate in Malaysia, and the company operates research and development (R&D) activities in Australia. The automotive segment manufactures, assembles and sell automotive parts. The segment manufactures modular components including intake air fuel module, fuel tank, corner module, parking brake assembly, duplex actuation system, rear combination lamp and head lamp; metal and suspension parts including chassis and body parts, sub-frame, front deck, cross-member, door inner front, dash panel, trailing arm and muffler; and plastic components including lamp, bumper, fuel railassembly and rear spoiler.



The composite segment is involved in the manufacture, assembly and sale of EP-X carbon composite bicycles and bicycles components. The water meters segment is engaged in the manufacture, assembly and sale of water meters. EPMB manufactures a range of products for both domestic and international automotive original equipment manufacturers (OEMs), including Proton, Perodua, Toyota, TRW, Honda and Suzuki. The group's subsidiaries include: EP Polymers (M), EP Moulds & Dies (M), EP Metering Services (M), Fundwin, EPMB (Australia) and Circle Ring Network.

OSK: EP Manufacturing had recently secured a new contract from Perodua for the manufacture of the cross member structure (a structure that holds the engine) for both the Myvi and Alza after investing over RM40m-60m in dies, moulds and R&D. Previously EPMB had only secured Perodua’s localization programme for the Viva’s cross member, from which it collects an estimated RM700-800 per car, along with the other parts it supplies.

The further localization of the Myvi and Alza would see EPMB increasing the supply of auto-parts to both models from 33 parts to 103 parts in total,
almost tripling its revenue collected per Myvi from 2010 onwards. We estimate that revenue contribution from Perodua would increase from RM74m (as collected in FY08) to as much as RM196m in FY10 on the back of the higher average revenue per Perodua vehicle supplied (from RM477 in FY09 to RM1115 per vehicle). The growing revenue from Perodua will increase its proportionate share of EPMB’s total revenue from 15%-17% in FY08-09 to over 35% from FY10 onwards.

Saaya Irie : A6083454-22

EPMB’s relationship with Proton remains intact given its long-standing relationship as a critical tier 1 auto supplier for Proton’s IAFM (Internal Air Fuel Module), which is used alongside the Campro engines. Also worth noting is that EPMB has contributed in enhancing the overall performance of the engineering performance of the IAFM. Furthermore, Proton also owns a minority stake of about 4% in a JV with EPMB under the company name of PEPS-JV, which further solidifies the relationship between the two companies.
Furthermore, cost cutting measures going forward will also be reflected by the reduction in interest expense as EPMB pares down its debt level further of which management is targeting its net gearing ratio to hover at 50-55% by FY11. According to its debt schedule, EPMB is expected to pay off RM61m over the next 1 year. EPMB’s net gearing effectively trimmed to 88% and 72% for FY10-11. EPMB will likely continue to enjoy a zero effective tax rate given its unutilized high reinvestment allowance.

EPMB’s management is optimistic on Perodua’s recently launched Alza, for which management said the demand has been encouraging as the booking period is stretched as far as 4 months. While there have been concerns over the potential cannibalization on Myvi sales, the impact will not be severe as vehicle sales for the Myvi have remained uninterrupted to date despite the recent launch of the Alza. Perodua anticipates that bookings could average well above 4000 units per month for FY10, beating Exora’s monthly average sales to date since its launch earlier this year.

I generally would shy away from companies whose business model is structured around subsidised industries. However, considering the state of markets and significant broadening in revenue base, its a good mid term trade. Its a pretty straight forward buy owing to the new localization programmes by the government, which in turn boosted EPMB's fortunes for the Myvi and Alza which the company recently secured. Net profit for 2009 was RM6.5m on revenue of RM442.9m. The new contracts secured will jump revenue for 2010 to over RM560m and nearly double the net profit to RM12m. The net EPS will jump from 3.9 sen to 7.4 sen. I don't have to go into PER talk, you can do the math. Its 52 week high was 60 sen, which is my immediate target, I think 70 sen over this quarter is achievable.

Bloomberg Ticker: EPMB MK

Share Capital: 166m
Market Cap: RM73m
52 week H│L Price (RM) 0.60 - 0.12


Major Shareholders (%)
Mutual Concept 37.21
DBS Asset Management 7.01
Abdullah Bin Hamid 5.09

The above were views on stocks and sectors that I like, not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

p/s photo: Saaya Irie