Faced with the greatest economic challenge to the country since gaining independence in 1957,
Malaysia is firmly focused on recovery.
December 11, 2020
In its latest report on Malaysia’s economy, the central bank noted GDP improved significantly, marking a smaller contraction of 2.7% in the third quarter compared with the 17.1% dip the previous quarter. The government expects the rebound will continue, projecting the economy will grow up to 7.5% next year.
According to the Ministry of Finance (MoF), production and trade picked up over July to September, combined with a rise in private consumption, while unemployment fell over the same period. Meanwhile, stimulus packages unveiled by the government to ease the economic fallout from Covid-19 are expected to contribute over four percentage points to the nation’s GDP growth.
Malaysia has moved quickly to accelerate digital adoption by businesses, education and society. This will help the nation’s industries, from manufacturing, healthcare, electrical and electronics to e-commerce, support the country’s recovery.
Amid a global call for more medical protective gear, which increases competition in the market, Top Glove, the world’s largest rubber glove maker, believes it can stay ahead of the game. Not content to rest on its laurels, Top Glove’s goal is to continue to dominate global market share—solidifying its No. 1 status in the rubber glove industry—and become one of the world’s top 500 companies by 2035.
Silverlake Group is another homegrown company that intends to push ahead with expansion plans. Its revenue rose to US$161 million in the year ended in June, with a compound annual growth rate of 8% since 2011.
Math is the basis for its latest cloud computing solutions as the company helps its customers detect, manage and combat fraud in the banking, finance and insurance industries. Silverlake Group is poised for further growth in 2021 on the back of its partnership with an institutional investor.
Going regional is also on the cards for BookDoc. The five-year-old medtech startup is ramping up its business to expand its footprint by complementing its patient-doctor booking system and healthmetrics monitoring system with chat-based medical teleconsultations.
The company has tied up with China’s WeDoctor, a global healthcare platform that boasts 700 million users. BookDoc uses WeDoctor’s AI technology to screen calls and offer teleconsultation services to patients in its ecosystem seeking advice for a range of medical concerns, including Covid-19.
Moving forward, the central bank believes the economy will improve in tandem with stronger global demand and domestic policy support that includes government-targeted wage subsidies, public projects and low interest rates. It also anticipates the economic impact of Covid-19 containment measures reintroduced in October will be less severe compared with earlier restrictions as businesses have been allowed to continue to operate.
Noting that Malaysia’s economic fundamentals are still strong and its economic base is sufficiently diversified to weather the storm, the MoF says it will continue to closely work with the private sector and the public to foster sustainable growth in 2021.
Top Glove: Accelerated Growth Amid The Pandemic
The world’s largest rubber glove manufacturer sets bigger goals as it steps up production to meet rising global demand.
Since the beginning of the year 2020, Top Glove, the world’s largest manufacturer of rubber, nitrile and surgical gloves, has seen its shares increase more than fourfold on Malaysia’s main stock exchange thanks to a surge in global demand for personal protective equipment following the coronavirus outbreak.
Some investors, however, may question whether there is still room for growth given that a vaccine is expected to be available for distribution by 2021, according to the World Health Organization.
“Our share value is nowhere near its peak,” says Tan Sri Dr Lim Wee Chai, Executive Chairman and Founder of Top Glove. “For this year and 2021, we expect demand to increase by 20% to 25%. Post-pandemic, it should stabilise at around 15%, which is higher than pre-pandemic. There is a lot of potential for growth as rubber gloves are an essential item in the healthcare industry.”
“For the financial year ending 2021, analysts have projected our company’s aftertax profit to be around US$2 billion, compared with this year’s profit of US$500 million,” he adds.
Hong Kong Listing
Already listed in Malaysia and Singapore, the Malaysia-based company is eyeing the Hong Kong stock exchange next.
“Our track record is proven. Investors who bought our shares back in 2001 when we listed in Malaysia would have seen the value increase by 400 times to date,” Lim says. “Similarly, those who bought our shares when we listed in Singapore four years ago would have seen the value grow by 10 times.”
“Our annual compound growth rate in terms of revenue is about 23%, which is more than double the overall [industry] market growth of 10%.”
“We are confident that we will perform even better on the Hong Kong stock exchange, which has a market capitalization of US$5.36 trillion. We hope to raise US$2 billion to fuel the company’s organic growth, which includes buying more factories and machinery to cope with growing demand for our products.”
As the call for protective wear increases, more companies are moving into the rubber glove business. Shrugging it off, Lim says, “We would be more worried if there are no competitors. However, the glove business is both challenging and competitive. When we started 20 years ago, there were 200 glove manufacturing companies, but only about 50 are still around today.”
Commenting on allegations of forced labor by the U.S. Customs and Border Protection (CBP), Lim says, “We have submitted an independent audit report to the CBP and will be making remediation payment of about US$32 million to more than 11,000 migrant workers. We hope to work with the CBP to clear the matter soon.”
He adds, “We take employee well-being seriously and there is a team of full-time professionals within the company, including doctors, nurses, nutritionists and counsellors, who look after our 21,000 employees.
“Moving forward, our goal is to grow the company twentyfold and be on the list of the world’s top 500 companies by 2035. To do that, we need to continually source for talents, especially for our research and development unit, and increase investment in automation and robotics to boost production capacity. Currently, we are diversifying with more product offerings like face masks and other medical protection devices, and are looking out for mergers, acquisitions or joint ventures that sync well with our current operations,” Lim says.
Silverlake Group: Opportunities In A Challenging Year
Founder Goh Peng Ooi shares his thoughts on how Covid-19 will impact the company and the financial industry, and the plans he has in place to make his business more competitive.
The coronavirus pandemic has taken the spotlight for most of this year, and the global economy is facing one of the worst economic downturns in decades.
Most businesses—from multibillion dollar airlines to mom-and-pop establishments—have been hard hit, and many employees lost their jobs as a result of the crisis. There have been over 58 million cases of Covid-19 confirmed worldwide, and more than 1.3 million deaths.
The financial sector has not been spared from the pandemic, with many Asian banks posting lower earnings due to reduced loan volumes amid slower business activity. Silverlake Group, whose clients comprise many of the top banks in Asia, also registered a drop in revenue.
A Silver Lining
However, Goh Peng Ooi, Founder and Group Executive Chairman of Silverlake Group, a company that is known for providing core banking software and other solutions to banks, insurance, fintech, retail companies and governments, sees a silver lining during the pandemic.
Its core banking solution, which is a key building block of infrastructure in the financial economy, is essential in helping banks to adjust to the new normal, he says. Simply put, banks in the region, which are largely still profitable despite weaker earnings, will likely continue to need Silverlake Axis’s core banking solutions.
“Covid-19 is not going to kill banking. In fact, it is going to accelerate banking transformation,” Goh says.
There’s a saying that behind every crisis, lies an opportunity, and Goh believes Silverlake Group can be a beneficiary of when the going gets tough for the banking industry. “If the banks are compelled to merge, this will also be very good for us,” Goh says. “We are very good at integrating core systems when banks combine. It is a very complex exercise, and it requires the right resources, the know-how, and the ability to do it on time.”
“Covid-19 is not going to kill banking. In fact, it is going to accelerate banking transformation.”
– Goh Peng Ooi, Founder and Group Executive Chairman, Silverlake Group
Goh adds that the year has allowed Silverlake Group to focus on reorganizing and consolidation.
Before the pandemic hit, Silverlake Group’s portfolio of 130 companies reported directly to the head office, including Silverlake Axis, which is listed on the Singapore Exchange. Under a reorganization carried out earlier this year, these companies were consolidated into one of three units: banking and finance, insurance, and Mathematical Intelligence (MI) Cloud.
Two years before Goh founded Silverlake Group in 1990, he worked on a mathematical proposition that banking and finance was an example of group theory. Since then, Goh has applied that and other mathematical theories to grow the group’s operations, including category theory, specifically topoi.
Goh, a passionate mathematical thinker, believes the key behind Silverlake Group’s success is mathematics, and it will remain so in the future.
“If you want to run a good company, the right thing to do is to use mathematics and structure it in such a way that it can respond to any type of situation,” Goh says.
Over the past decade, Silverlake Group has grown significantly. Its listed entity Silverlake Axis saw revenue rise to US$161 million in the financial year ended in June, with a compound annual growth rate of 8% since 2011. Net profit was US$45 million with earnings increasing 4% over the same period.
This growth was due in part to the group’s evolving business model; more than two-thirds of its annual revenue is recurring revenue, with high profit margins.
One of the areas that Goh sees strong growth potential is the group’s new MI Cloud division.
Using mathematics, the company is able to build MI Cloud solutions to help banks and businesses analyze operational data efficiently and accurately, detect fraud, manage risks, understand customers better, and even predict future trends.
“You can use mathematics to predict what is going to happen but mathematics cannot predict exactly when it is going to happen,” Goh says.
Although Silverlake Group’s MI Cloud solutions were introduced this year, Goh says the platform is the result of more than two decades of work and investment. “A substantial portion of the dividends I received from Silverlake Axis were used to construct the MI Cloud that we have today,” says Goh, who indirectly owns over 68% of Silverlake Axis.
He adds the company did not rush into launching MI Cloud, as he wanted to wait for the right time to be certain that it could pass the necessary “stress tests.” It has offered MI Cloud solutions to end users in the banking and education sectors for free since 2008, so that the company could ensure the platform was secure, scalable and simple to use.
“Why start with banking [with MI Cloud]? It is because we wanted to start with the toughest and most mission critical applications first,” he says.
Ushering In a New Era
This year will also be the year when Silverlake Group begins to transform itself from a single-leader organization to institutional leadership. “We are signing up with a fund, and they are coming in to invest [in Silverlake Group],” Goh says.
The participation of the fund is important, Goh says, as it will help Silverlake Group to be more competitive globally. The group has produced very good technology over the years, but that in itself will not take the company to the next level, he explains.
“With the fund coming in, we are trying to create a group that is very good in technology, and at the same time have deep pockets,” he says. “Also, the fund will not view Silverlake Group as a Goh Peng Ooi company, but instead it will look at it as an investment and will manage it from an institution or investment point of view.”
Moving forward, Goh says Silverlake Group will operate much more efficiently, with each of the three core groups (banking and finance, insurance and MI Cloud) to be run by people specialized in their particular field.
“Essentially, what this means is that our people will be able to serve our customers better, come up with products much faster, and be more focused,” he says.
The medtech startup has pivoted to adapt to the challenges brought by Covid-19 through new partnerships at home and abroad.
It may be cliché to say there’s never a better time to be in healthcare, but it is true when it comes to healthcare platform BookDoc and its Founder and CEO, Dato’ Chevy Beh.
“No one in the world was prepared for what has taken place in 2020,” says Beh. “Healthcare around the world, and especially for us here in Southeast Asia, has been changed forever. While I take no joy in what has happened, I see BookDoc as a part of the broader cog in the wheel to help people take control of their health during this unprecedented period.”
The healthcare platform began its journey five years ago in Malaysia, connecting individual patients with medical care professionals of their choice. Through its namesake app, the company created a sustainable ecosystem between doctors, individual and corporate patients, and the insurance industry.
Since then, BookDoc has expanded its presence to Hong Kong, Thailand, Singapore and Indonesia. In Malaysia, it continues to grow its portfolio of partner organizations that include the Ministry of Education, the Royal Malaysia Police and the Malaysian Army.
It also has promoted advances in wearable technology, such as smart watches, to monitor patients around the clock and help them make better decisions through regular updates about their health.
The WeDoctor Advantage
In a timely pivot, BookDoc added telehealth consultation services to its expanding portfolio of services this year. The company partnered with WeDoctor Holdings in May, a Hangzhou, China-based, healthtech platform founded in 2010 by Liao Jieyuan. The Tencent-backed company has more than 700 million users and offers a range of services including online consultations with medical professionals.
“We had been in conversation with WeDoctor for some time to offer telehealth consultation services for a range of areas such as mental and reproductive health, issues that may be uncomfortable for some to talk about in person,” says Beh. “By partnering with WeDoctor, our patients on the BookDoc platform can text chat with doctors and get expert opinions from the WeDoctor platform.”
The arrival of Covid-19 pushed the companies to tweak their plans, he says. As the coronavirus spread worldwide, the two companies discussed how they could serve the greater good and agreed to add Covid-19 to their list of consultative services.
Beh notes that in the early days of the pandemic, not much was known about the disease and many healthcare systems were overwhelmed with new Covid-19 cases. The collaboration between the two companies has helped lessen the burden of healthcare providers in the region by providing real-time telehealth consultations to patients.
“The partnership was beneficial for both companies as WeDoctor wanted to enter Southeast Asia and BookDoc was able to provide these services in the five countries we operate in,” he says. “What’s great about partnering with WeDoctor is that its platform has built-in, advanced machine learning algorithms that can help with initial queries and answer them without human intervention.”
“The platform is also multilingual, user-friendly to navigate, and free of charge to use. Only when patients have more complicated questions will they be directed to actual doctors for further follow-up advice.”
Home Care Responsibility
Over the years, BookDoc has continued to expand its partnership ecosystem and widened its service offerings with a number of healthcare entities, including government agencies. For example, during the height of the Covid-19 national movement restrictions, BookDoc partnered with Malaysia’s Ministry of Youth and Sports to help competitive athletes stay fit by integrating their exercise routines onto the BookDoc platform. Coaches were able to get automatic updates of athletes’ at-home workouts through the BookDoc app, Beh explains.
He adds that BookDoc has expanded its ongoing collaboration with the Ministry of Health by providing new services available to Malaysians. “We began hosting webinars on BookDoc every day from 9:00 a.m. to 9:30 a.m. on topics pertaining to Covid-19. We started virtual telehealth consultations, where patients can seek a quick consultation should they suspect any symptom of Covid-19. The doctors can screen the affected patients quickly and appropriate measures can be taken to limit further contamination.
“We also developed a queue-management system, where patients are asked to register on BookDoc to schedule their next appointment, which helped government hospitals manage queues and practice social distancing,” Beh says.
The Ministry of Health selected BookDoc as the booking platform through which users could set up appointments for convenient, at-home Covid-19 testing instead of having to visit a hospital, he adds.
“Some companies cut their losses during tough economic times but not us, as we decided to turn our headwind to become a tailwind.”
– Dato’ Chevy Beh, Founder and Chief Executive Officer, BookDoc
As a startup in the medtech space, the 35-year-old says his company wasn’t immune to the impact of Covid-19. BookDoc had to comply with Malaysia’s movement restriction order, set up standard operating procedures to ensure the safety of its staff and enable them to work from home. At the same time, BookDoc is an essential service and it needed to keep its business running smoothly by ensuring its call centers were optimally staffed.
“Some companies cut their losses during tough economic times but not us, as we decided to turn our headwind to become a tailwind,” he says. “We had to work extra hours to embrace and change with the times and capitalize on our resources to reach out to bigger markets to increase our penetration and product offerings.”
Beh says hard work has led to the firm’s successes. Last year it was included on CNBC Upstart 100, a list showcasing the brightest, most intriguing, young startups.
“We are very proud of this as we were the only Asia-based medical technology company included on the list, and this validates the plans and directions we’ve taken,” Beh says. “In 2021, we plan to go even further with WeDoctor as we leverage its expertise more. We also plan to expand our ecosystem further by partnering with any healthcare-based entities that see us as the one-stop shop of digital healthcare services in Southeast Asia.”