☕️ FT Minister's WTF statement: "We (govt) have successfully controlled this outbreak"

464 days of X-MCO and yet it got worse. After Disney+, Astro x Netflix in collaboration. John McAfee's death: suicide or murder? Prominent VC Andreessen Horowitz new USD2.2 bil crypto fund.

Know more, learn more. Be smarter in 3 minutes.

Reading hack: Hello new subscribers! To get around paywalls (ie. Business Insider, Bloomberg, NYT, Nikkei, Reuters), change your browser to ‘read mode’ or save it to read-it-later app like Pocket.

Random Weekly Thoughts: The Twisted Definition of ‘Profitability’

We are trying out this new section to share some original contents - our thoughts, observations, rants (ok, mostly rants) etc. Here goes the first.

A few days ago, we came across a talk by a c-suite from a rather sizeable, heavily funded Malaysian tech startup. The topic? Turning a startup into a profitable business. The irony: it is loss-making for 5 years straight. A simple check shows the startup has cumulative losses in the high 8 figures with a negative net worth. In its latest financial, for every RM1 of sales it made, it lost RM2.

In this 21st century, cheap-money era, the modern definition of profitability has been twisted to the max especially by startups. Is their definition Profit Before ALL Expenses (PBAE) instead of the conventional Profit Before Tax (PBT) / Profit After Tax (PAT) or if you want to cut some slack, Earnings Before Interest, Tax and Depreciation (EBITDA)?

On second thought, maybe they are right. If you are positive on a gross margin level, well technically, that is still profitable. But, by this definition and logic, MOST companies are profitable. That said, don't be surprised that there are some companies, even on a gross margin level, that are consistently in the red.

Caveat: they might have turned around the company in 2020 successfully right in the middle of the pandemic. Hence, the talk could be relevant. Then, I might be wrong - a profitable company indeed he/she is running.

Anyways, be careful from whom you take advice!

1. MARKET SUMMARY


2. NUMBERS AT A GLANCE

437,000 — the number of millionaires Singapore is expected to have by 2025, a growth of 62% compared to 270,000 in 2020. Singapore’s 2020 millionaire density was 5.5%, the second-highest in Asia after Hong Kong’s 8.3%.

464th day of MCO — with the pandemic showing no signs of abating, there is no end in sight. Hang in there everyone, we will get through this together. Stay safe!

Genting Group’s Resorts World Las Vegas has one of the world’s biggest LED screens in the world — 100,000-square-foot, which is 1.5 times the size of The White House. The casino opened its door yesterday and it is one of the most expensive resorts ever developed in Las Vegas, USD 4.3 bil.


3. COVID-19 SUMMARY


4. IN MALAYSIA 🇲🇾

  1. KPMG PLT had resigned as Serba Dinamik Holdings Bhd’s external auditor with immediate effect. The share price took a nosedive and closed 10% lower at 53.5 sen after the announcement. The group saw about 70% of its market capitalisation wiped off (RM3 billion) over the past month since the audit issues were made public.

    Counters related to Serba were not spared — both KPower Bhd and Sarawak Consolidated Industries Bhd fell 10.7% and 8% respectively.

  2. Gamuda Bhd’s net profit shot up by 2.5 times y-o-y to RM141.83 million for 3QFY21 ended April 30, 2021, as the construction and property projects and traffic on the expressways returned to pre-Movement Control Order (MCO) levels. No dividends declared for this quarter though.

  3. Want to know something Malaysian politicians are GREAT at? Claiming credit. Prime minister Tan Sri Muhyiddin Yassin and Datuk Seri Mohamed Azmin Ali proudly announced Risen Energy Co Ltd’s RM42.2 bil investment in Malaysia with the latter claiming this “demonstrates strong confidence in the country's administration and political stability.”

    PM stating the five-year investment from Risen involves the opening of a production base in the Kulim Hi-Tech Park Kedah and is expected to generate 3,000 employment opportunities for Malaysians.

  4. Astro Malaysia Holdings Bhd will be bringing Netflix’s streaming services to Astro’s platform to consolidate its position as the leading provider of entertainment services in the country. Astro’s customers will be able to enjoy Netflix via Ultra Boxes first and then Ulti Boxes in the coming months.

    Earlier this month, Astro had also partnered with Walt Disney Co to launch Disney+ Hotstar streaming platform in Malaysia.

News in brief

  1. The human resources ministry said the negotiation with the Indonesian government on the recruitment and placement of domestic helpers has been postponed due to lockdown in Jakarta. The wait for foreign domestic workers is likely to go on until the end of the year.

  2. Eco World International Bhd reported a lower net profit of RM11.3 million for 2QFY21 ended April 30, 2021, compared to RM20.06 million a year ago due to higher finance cost, administrative and general expenses and marketing expenses. The company has declared a special dividend of 5 sen, payable on July 23.


5. AROUND THE WORLD 🌎

  1. After its failed USD5.3 bil acquisition of Plaid due to regulatory block, Visa has announced its plan to acquire a similar business, Tink for EUR1.8 bil (USD2.15 bil). Tink is a leading European fintech startup that focuses on open banking application programming interface (API). In Europe, banks and financial institutions all have to offer open banking interfaces due to EU’s Payment Services Directive PSD2, which gives rise to the demand for Tink’s offerings as it helps customers to connect their bank accounts from their own apps and services. 

    The Swedish-based startup integrates with 3,400 banks and financial institutions, with 300 banks and fintech startups using Tink’s API to access 3rd-party bank information with clients like PayPal, American Express etc and covering 250 mil bank customers across Europe. 

  2. In the middle of what most people and media would call a ‘bear market’ now in the crypto industry (in our opinion, we are far from a bear market), prominent VC Andressen Horowitz (AH) has raised USD2.2 bil for its 3rd crypto fund and its largest vertical-specific fund ever. This showcases how institutional backers are growing more comfortable with cryptocurrencies especially with AH’s track record of a USD11.2 bil stake in Coinbase (though it has slid 30% in recent times). With this new announcement, AH has USD18.8 bil assets under management. 

  3. Former NSA consultant and data privacy advocate Edward Snowden, that is highly wanted by the US government, has warned that Julian Assange “could be next”, after antivirus mogul John McAfee, died by apparent suicide in a Barcelona prison cell following news that he will be extradited to the US on criminal tax evasion charges. McAfee tweeted back in Oct 2020 that if suicide did happen to him, “it will be no fault of mine”, indicating that a murder attempt instead might have taken place.

News in Brief:

  1. Binance, one of the world’s largest crypto exchanges, has shared how it helped authorities from Korea, Ukraine, Spain, Switzerland, and US, among others, to take down a cybercriminal ring that has laundered USD500 mil in ransomware attacks. 

  2. A new network of angel investors has launched in Southeast Asia called Fintech Angel Operators, boasting members who hold senior positions at major tech firms like Grab Financial, PayPal, Stripe, Revolut and Remitly. Apart from cutting cheques, they will contribute their expertise to early-stage startups in the region.

  3. A researcher from Seattle claimed he has discovered 13 partial coronavirus sequences from samples collected in Wuhan, China, that were deleted from an online US scientific database last year. This discovery would help in researching the origins of the coronavirus.


6. FOR YOUR VIEWING PLEASURE 👁👁 (Beta Mode)

  1. 28 hours and 45 minutes — the amount of time required to assemble a 10-storey residential building. Only in China.

  2. A real good advertisement for a firelighter featuring Martha Stewart and Snoop Dogg. If you get it, you get it. Watch the video ad here. If you don’t get it, email us by replying to this newsletter directly.

    Share

  3. Climate change is real. This is what happens to Malaysia if we overshoot 1.5 degree Celsius global warming in a research by the University of Nottingham and University of Malaya.