TOURISM-RELATED property developer Yong Tai Bhd has staged a turnaround in its 1Q FY6/2023 ended June 30, 2023 with a net profit of RM1.81 mil from a net loss of RM5.56 mil in the corresponding quarter a year ago.
Its strong recovery in earnings was attributable to the group having secured additional sales from competed property units of RM66 mil in its 1Q FY6/2023. Boyed by its property development segment, Yong Tai’s revenue jumped by more than 10 times to RM49.4 mil from a mere RM4.9 mil a year ago.
As for the group’s property investment segment, Yong Tai has been working with local show producers and artists to showcase their art and cultural shows, musicals and concert at its Encore Melaka on a revenue-sharing model.
This has helped grow revenue during the quarter under review compared to a year ago with contributions from both rental income and the group’s share of ticket sales.
“This represents a turnaround point for the group as the re-opening of the economy helped us to deliver our ongoing property development projects,” commented Yong Tai’s CEO and executive director Datuk Wira Boo Kuang Loon.
“We showed our commitment towards our customers as we completed and delivered vacant possession of Amber Cove in October 2022 ahead of the contractual period.”
As of Sept 30, Yong Tai has a total unbilled revenue of RM148 mil – and with its Impression U-Thant on track to complete by 1Q 2023, the group’s property development business is poised to sustain earnings growth in the near term.
Despite the improvement in its financial performance, the group will continue to be prudent on new property development launches as the management acknowledges that the property market remains uncertain and will continue to face challenges such as geopolitical instability, supply chain disruption, interest rate hikes and inflation.
Sharing the improvement seen in its Encore Melaka theatre, Boo remains optimistic that despite its low occupancy rate due to the lack of tourists arrivals as China’s zero-COVID-19 policy continues, Yong Tai has seen a rise in interest in the use of Encore Melaka for events.
On Dec 2, the 32nd Malaysian Film Festival organised by The National Film Development Corporation Malaysia (FINAS) will be held at Encore Melaka. This is a testimony to Encore Melaka’s state-of-the-art capabilities and recognition of its international standard to be a preferred venue for such a grant event.
Going forward, Yong Tai will continue working with various international show producers on events or shows that could boost earnings through rental income and potentially drive ancillary income from merchandise sales, accommodation and broadcasting revenue.
Aside from that, Courtyard by Marriott Melaka, a 287 rooms four-star international business luxury hotel, is also targeted to be open by end-December 2022. The opening of the luxury hotel operation is expected to benefit from the pent-up demand in the tourism industry.
At the close of today’s mid-day trading, Yong Tai was up 0.5 sen or 2.5% to 20.5 sen with 194,100 shares traded, thus valuing the company at RM78 mil. – Nov 24, 2022
