Stock code: 5025 NWP
16 December, Wednesday
Note: after part 1 of the Q&A was
published 12pm today, NWP announced during noon break that it has
signed an MOU with Hoong Li Development Sdn Bhd, to explore engaging NWP
for project management services for a light industrial development
project. This validates my reported updates yesterday and is consistent
with market info thus far.
Private Investor Brief by Senior Management
[ Part 2 ]
Q1:
In his first media conference after re-joining as Group CEO, apart from
property, DS Nelson did mention a new automotive business venture,
possibly a tie-up with a “well-known food delivery service provider”.
This got everyone curious and excited. And also a little concerned
because this is a totally new business for NWP. I will put it bluntly:
can do or cannot do?
A: Hahaha this is the
most important question for today right? I get that the market is
excited and curious at the same time. We ourselves were a little
surprised that a brief sharing by our CEO got reported and now it is the
talk of the town. This really shows how powerful media reporting can
be!
Back to your question, this venture has been in the works since the start of this year and Covid did delay the progress a fair bit. The initial plan was to launch by Q3. All the preparatory work is done. We are about to go live anytime now. To get to where we are today in terms of this project is already remarkable, so is just about execution from now on.
Q2: You
did not answer directly but I take it as a ‘can do’ because my
impression from your tone is that it is not about whether the project is
on or not, but rather how to get it off the ground and execute the
operation side of things.
A: You would not be
wrong to think so. Well, we have to be extra careful with what we say
now, taking a lesson from Datuk Seri’s media coverage last weekend haha
Q3:
Assuming everything goes to plan, how much can this automotive business
contribute in terms of financial numbers and profitability?
A: We do have a rough
estimate, or guess-timate, because this project is the first of its kind
ever. The projections have a wide variance depending on many factors.
But I will try to put it into perspective.
Assuming, if, we partner the ‘fastest-growing delivery provider’, and assuming we capture just half the number of riders, a defensive statement would be profits in the low double-digit millions.
Put it this way, if it were just a single-digit million profit project,
I do not think my bosses would even care to start! They would say
"don't waste my time"!
[Throughout the discussion, NWP Manager 1 was kind enough to update with reference to slides on his laptop. I thicken my skin for a second and requested a pdf copy, and sought his permission to share to investors. Voila! He said ok, provided some sensitive info is covered until after any official announcements by the company.]
It was a fruitful sharing over breakfast and coffee for almost 2 hours. Will digest all the info and looking forward to attend tomorrow’s virtual EGM before updating my analysis on NWP.
Thank you.
Best regards,
Alpha7 Research
https://klse.i3investor.com/blogs/alpha7research/2020-12-16-story-h1538250464-16_December_NWP_Investor_Brief_PART_2.jsp
