Mega First Corporation Berhad (MFCB) Q4 FY2025 Earnings Call Transcript & Summary

A very good afternoon, ladies and gentlemen. Welcome to the Fourth Quarter 2025 Mega First Corporation Berhad Investor Briefing. My name is John Huo from VUCA Insights. I will be co-hosting this session with my fellow co-host, Rondy Yunanda Yong. Can we say from Stockbit or now -- changed a bit. It's changed a bit. And obviously, our guest of honor, Mr. Yeow See Yuen from Mega First. For those new to the session, I'm pretty sure there are some. And for those who are veterans of the session, bear with me as I go through some housekeeping rules, I wouldn't say rules or it's more of a guidance. Usually, because of Mega First's diverse lines of businesses, what we normally do is we have a short presentation by Mr. Yeow giving a brief overview of all the various businesses and the performances within those divisions. And thereafter, we will have a question-and-answer session where we will try to group as many questions within the business divisions. [Operator Instructions] So without further ado, I'd like to give the floor to Mr. Yeow for his presentation. Mr. Yeow?

Thanks, John. Welcome, everyone, to fourth quarter results briefing for 2025. All right. Okay. A quick review of fourth quarter results. I will make reference everything to normalized revenue and profits, at least to give an idea how the core earnings are doing. Normalized revenue was up 2.6% to MYR 350 million, mainly because of strong growth in Packaging and Resources, which more than outweighed a minus 5% decline in RE revenue. Normalized PBT is down 13.5% to about MYR 120 million, mainly because of the ForEx loss arising from the strengthening of the ringgit against the U.S. dollar. Reported PBT was down 10%, a slightly lower rate of decline, mainly because of a higher net gain from nonrecurring and other items. Within the other items, losses from joint venture and associates narrowed due to improved performance from Edenor compared to a year ago, although the oleo chemical joint venture continued to suffer from low plant utilization and currency headwinds plus stiff competition. In terms of the normalized profit after tax and noncontrolling interest is minus 15% to MYR 111.6 million, again, mainly because of the ForEx loss that we suffered during the quarter. Okay. Moving to the individual division. Our RE remained the star performer. The average Don Sahong EAF was 89% versus 85.7% last year, which is quite a substantial gain. The normalized revenue was down 5%. That's mainly because of the currency loss in translation -- currency translation despite the higher hydro energy volume generation and also a lower weighted average hydro tariff after we signed the new SPPA and SCA. Normalized PBT in ringgit terms is actually up 1.9% despite lower revenue because of the reduced amortization following the extension of the concession by 5 years and the lower turbine overhaul costs plus lower net royalties after we bought over the water rights from the Government of Laos. This one shows you the water level throughout the year for the last 3 years and how the capacity factor moves over the dry and wet season. As you can see from the 2025, which is the orange line, in the second half of the year, it has largely hovered above the previous year because of healthy water levels. And in the first half of the year, you can see that the EAF is actually lower compared to the blue line 2024, and that's because of the dilution from the fifth turbine. All right. Moving to resources. It's been a challenging year for resources. In the fourth quarter, revenue was up 8%. That's because of higher sales volume of lime products, which more than offset a weaker export currency. And the growth is coming mainly because of low base effect in quarter 4 of 2024. PBT, however, declined 21% as the margin was affected by higher operating and transport costs plus a weaker export currency. Packaging division, despite a very competitive environment, we managed to grow our revenue because of aggressive marketing after our capacity expansion over the last 2 years. PBT is up 24% on stronger sales mix and higher plant utilization. Okay. On the balance sheet review, I think the only thing that is worth noting is our receivable continues to come down after we have restructured the trade receivable from EDL. Currently, the EDL trade receivable hovers around 2 months, which is in line with the credit period extended to them. Other than that, there's nothing much. Water rights, of course, continue to come down as we go along the concession period. And the long-term noncurrent receivable is amount receivable from EDL. So we have been receiving the quarterly -- the monthly installment from them on time. Okay. Cash flow, the snapshot is we generated MYR 763 million from operating activities, which is almost 60% higher than the previous year, of which MYR 318 million was deployed for investments, which I'll show you the breakdown later. MYR 171 million is distributed to stakeholders and the balance of MYR 313 million is retained in the group for future expansion. The total capital deployed in 2025 is MYR 318 million, substantially lower than MYR 824 million in 2024. And the bulk of it still goes to RE and also -- on Others. Others is mainly acquisition of land and also investment in Edenor, unfortunately. Gearing position improved year-on-year. At the end of the year, our net debt-to-equity ratio has declined from 25% to almost 16%. We have also gradually stepped up our dividend as guided in the past. We have declared a final dividend of MYR 0.05, bringing the total full year dividend of MYR 0.0975, which is about 8.6% higher than the previous year, and we will continue to step up dividend in 2026 and '27. All right. In terms of prospects, I'm sure all of you know the macroeconomic remains very, very uncertain because of the U.S. changing policies, consumer sentiment generally remains weak and a lot of geopolitical tensions going on, including the Iran and U.S. war that happened over the weekend. And the ringgit strength is not good for all exporters, including our manufacturing exports and also our U.S. dollar-denominated RE income. Overall, in the RE division, in U.S. dollar terms, we expect it to remain resilient. But the resources will face intense competition from regional players, just like in 2025, while the Packaging side, we are trying to expand the customer base and improve plant efficiency in a very tough market condition. On the Oleo side, the plant has stabilized, but we continue to face challenges from Indonesia's palm oil export policies and biodiesel mandates. We are also faced with industry overcapacity worldwide. We are making a lot of effort to implement measures to stop the losses. That will be our priority in 2026. Overall, in terms of capital deployment, we will start to prioritize cash preservation. We will focus our investments moving forward to our RE, strengthening our RE and all the noncore businesses, we will start to rationalize them and may even exit some of them. So as you can see from our capital commitment as of 31st December 2025, the capital deployed will continue to decline year-on-year. And so far, it's only MYR 67 million. And of which MYR 26 million of Packaging is actually the tail end of the previous 2 years' expansion. So it's not a new capital commitment. Renewable Energy is the remaining balance to complete the Maldives and Green Corporate Power Agreement in Tronoh. Food security is ongoing. So it has been reduced. Now of course, this will change if we can secure new RE projects, which we hope to do so sometime in 2026. On RE update, we are overhauling 2 turbines in 2026 compared to one in 2025. This will likely cause a small dip in the hydro energy generation, not significant because we are doing all this overhaul during the wet season -- during the dry season. So normalized U.S. dollar revenue expected to grow year-on-year because we are going to energize the 2 large-scale solar plants totaling 62.4 megawatt peak sometime in early second quarter 2026. There will also be a slight increase in hydro tariff from USD 0.06 to USD 0.0605 from 1st January 2026. With the energization of 62.4 megawatt peak of solar in second quarter 2026, our total RE capacity will increase to 422.2 megawatt peak this year, comprising 77% hydro and 23% solar. PBT in U.S. dollar term will likely remain stable as solar profit growth is likely to offset higher turbine overhaul costs. But in ringgit terms, it may face headwinds if U.S. dollar continued to depreciate against the local currency. From this year, we will also start to pay taxes on income -- corporate income tax in Laos, starting with 5% in 2026. That is at the project company level. If you need guidance in terms of what the effective tax rate will be, I think it's safe to assume between 3.5% to 4% for 2026. As mentioned earlier, we will continue to pursue opportunities in RE now that we have decided to refocus our capital deployment to our main core business, which is Renewable Energy, not just in Malaysia under the BESS and CRESS scheme, but also in the region as well, including Laos and Cambodia. This is just pictures of the almost completed Tronoh project, actually, it looks like it's completed. We just have not energized it, and we should start to energize it next month in April. And this is Maldives. We have completed all this construction. We are just waiting for the grid to be ready for us to connect it, and we are hoping that it will be connected in second quarter of 2026 as well, this 11.4 megawatts. On the Resources side, I don't think the situation is going to improve. Compared to 2025, operating environment continues to be challenging, again, because of the subdued activity, a weaker dollar, which is our export currency, elevated domestic costs and also intense price competition from other lime suppliers, including the ones from China. So we will continue to focus on improving our production cost efficiencies and expanding our customer base. And we believe that overall, the earnings should be satisfactory in 2026 for the Resources division. Moving to Packaging division. Outlook remains competitive, but we will continue to aggressively market our products because of the excess capacities that we have, and we expect earnings revenue to grow resulting from that. Again, we expect our earnings overall to be satisfactory as well for 2026. All right. I'll stop here and take questions.

Thank you so much. Rondy, do you want to fire the first one?

Thank you, Hue Yeong for categorizing all your questions.

You go first.

Okay. Do you want to answer the first one first, the share buyback or we leave that to the last?

Leave it to the last.

I leave it to the last. Okay. So Yeow, I think we start off with Don Sahong. Will the 2 major overhauls at Don Sahong be fully recognized in first quarter '26? Or will part of the cost be recognized in the current quarter? Okay. That's the first one first.

The cost of overhaul will be recognized as and when they are incurred. So it should be recognized within the first half of this year with a little bit recognized in fourth quarter last year. Because it started in early December 2025.

Okay. Yes, I'm just scrolling down to look for more Don Sahong questions. Okay. No. Related to renewable energy, was Mega First involved in the Sarawak Energy RFP for the 5 Dam project?

We will be -- we would like to participate, and we are working on it.

Okay. Got it. Regarding the projects referred to by Chairman during AGM, are there any positive updates at this stage. I think this is in more general. And is it timely to provide further disclosure? Are these opportunities more focused on solar or hydro. And could management share an indication of the estimated investment size or project scale?

Well, I mean, let's start off with, say, Sarawak. I'm sure you know the sizes. It can be as low as below 100 megawatts all the way to 300-megawatt cascading hydropower plants along the river. In Laos, we continue to explore hydro and also even water rights. In Malaysia, of course, we are looking at BESS, CRESS and even potentially pump storage projects. And in Cambodia, we may explore wind projects. I can't tell you we are -- because now we are refocusing our attention purely to RE primarily on RE. We are hopeful that we can at least secure 1 or 2 projects.

For RE, okay? So the next one related to RE would be, I think, a very general question is, where does management see the next phase of growth for Mega First? Will it -- I'm guessing he's trying to say whether it's your RE division, which I think you partially answered? Or is it more still a little bit more diversified into Food Security, hospitals?

I think the primary growth in the next 1 to -- or at least in the next 2 to 3 years will be RE. In fact, as I mentioned earlier, we are rationalizing the noncore investments with the aim of either exiting or basically cutting back on the investments in those businesses.

Okay. I think this looks like the last question for Don Sahong. It's asking, in 2026, Don Sahong will have a double whammy in that we are facing both the new 5% income tax and a heavier maintenance schedule to turbine overhauls. Does management expect the scheduled 0105 USM tariff hike and the contribution from the fifth turbine to be sufficient to offset these 2 specific headwinds. Or should we prepare for a year of contracted net profit for the RE division?

Well, as I explained in the prospect note, in U.S. dollar term, we expect PBT to be fairly stable, okay? There are offsetting factors with the -- we had additional income stream coming from the 2 solar farms that will be energized in second quarter 2026. And we believe that is more than sufficient to offset the higher overhaul costs in -- for the 2 turbines that we intend to overhaul, right? The only impact -- negative impact in ringgit term will be the depreciation of the U.S. dollar. So on translated earnings in ringgit terms, it may be lower. I don't know what the rate will be. I think that one you can easily calculate it for yourself and make your own assumptions, whether ringgit will end at MYR 384 or MYR 4.1, honestly, nobody knows, right? It depends on how the geopolitical events unfold, like suddenly, the flight to safety, U.S. dollars strengthened again because of the war in Iran. Of course, the tax will have a negative impact, and that will be an immediate knock off from the PBT. So you can safely assume around -- between 3.5% to 4% effective tax because we have -- at the project company level, we have interest tax shield. For the group, we don't have.

Repeat again.

At the project company level. The project company level is still geared owing money to the holding company. So that provided some tax shield on income tax. So although at the project company is 5%, when you look at the consol accounts, it would come in around 3.5% to 4% effective.

I see, okay. That's why I was trying to figure out how do you came out that 3%.

3.5% to 4%, not 3%.

3.5% to 4%. Okay. Conservative 4.

Okay. There is one question which had been asked quite a few times before. Given the ongoing macroeconomic challenges and debt restructuring discussions surrounding EDL, how secure are the project receivables for Don Sahong? And are there any geopolitical contingency if cross-border power trade policies shift?

I think this part of the region remains relatively safe. Our counter party risk is effectively EDC, not EDL. And this time around, after the new supplemental concession and power purchase agreement was signed, we no longer have the local currency portion. So all 100% of our billing will be paid via payment by EDC to EDL into an account where they have to pay us first before they can withdraw the balance. That is inclusive of the servicing of this long outstanding debt that's been restructured into an 8-year term loan payable every month. So we are receiving -- every month, we are receiving cash equivalent to more than what we bill every month because of the installments that they are paying for the 8-year term loan.

Okay. Okay. Nothing more specific on Don Sahong. Do you have any more for Don Sahong.

I don't see any.

Yes. I don't see any.

Solar. Yes. So Yeow Yuen. So for solar, how much top line contribution are the 2 large-scale solar plants totaling 64 -- 62.4 megawatts expected to generate, 885 and what is the anticipated net margin? I'm not too sure about 885, but I think referring to the 2 large-scale solar power plants. Yes, I think it's a typo too. Yes. So that's the first question. You're calculating tariff multiply by...

Roughly MYR 40 million turnover.

[ MYR 4,014 ]?

No, roughly about, hang on...

Take your time.

About MYR 25 million turnover from these 2. PBT, I think you can safely assume around 20% margin.

Okay. Okay. With regards to CRESS, is there any update. In the previous quarter, management mentioned Mega First has 2 parcels of land and working with 2 major partners to secure customers.

Unfortunately, under the new power system study, the PMU where our land is located faced some bottleneck, not at our site, but at another part of the grid. So in order to use the land to do CRESS, we will need that grid to be upgraded. I think TNB's grid upgrade is a little bit behind. So TNB has got to work very hard to upgrade the grid within Malaysia so that all these data centers, new RE plants can come up, including battery, okay?

So since you mentioned battery, any update on the BESS initiatives as well?

We will have to evaluate because the last tender was very, very competitive. Based on our financial model, the IRR is way below what is acceptable to us. And therefore, we don't mind losing it there.

Yes. Understood. Are there any other solar or wind opportunities within this region that management is able to share at this stage?

No. I think LSS-6 is coming up soon. So we will have to evaluate. Again, we are also looking at maybe doing pump storage projects as well.

Okay. So related to RE, there's one from Maldives. I think I can couple it here. "The highest point in Maldives is just 2.4 meters above sea level, rising water level is sinking the island, has this been taken into consideration when the company built the RE project there?"

Yes, I'm sure the technical people have already looked into it.

Okay. So I don't see any more for solar as well, Rondy, do you have any?

Beyond the recently commissioned 62.4 megawatt peak solar plants, what is the group's appetite for participating in the upcoming LSS quotas or other government-led NETR infrastructure projects?

I mean, based on our balance sheet strength right now and based on the cash flow that's coming in every year around MYR 500 million, MYR 600 million, we are able to take on a reasonable size project, at least MYR 1 billion to MYR 2 billion, if the opportunities arise.

And this is all from internally generated funds or debt.

Well, there will be some gearing. I mean in any RE project that you invest, I think it's prudent to at least have 30% equity. So you can look backwards. If we can have, let's say, MYR 1 billion equity to put in, then we can do a project that is about MYR 3 billion size.

1/3, 2/3.

Any more?

Okay. So on margin compression in Solar, as the cost of solar modules and solar panels drop globally, I think recently it has come back up again. But the barrier to entry for local solar developers is lowering. How does MFCB plan to defend its IRR on new Malaysian solar projects against increasing domestic competition?

I think the rise and fall of solar panel doesn't really affect how we operate. Because if the solar panel price is high, it applies to everyone. So it just means that whoever the bids, the bidding price will be higher and the reverse is true. The only risk is if you're caught, you tender low and then panel price move up before you lock in the panel prices, then that could potentially wipe out your profits, all right? Just like what happened in LSS-4, there's a sharp rise in panel cost. At the time of tender, panel cost was like MYR 0.17, MYR 0.18, and then it rose to close to MYR 0.30. So everyone asked for extension. And none of them managed to build until 1.5 years later when they start crashing down, then they build. But it won't affect the existing projects that we have secured because all these are locked in, all right? It may affect how we tender in the future and how much risk do we want to take in terms of future movement of the panel prices, all right? Because after you tender, there's always a period where you are kind of exposed to fluctuating panel prices, typically, at least 3 to 6 months. And during these 3 to 6 months, many things can change.

Have there been any -- I'm pretty sure this has been asked before, and I remember this in the previous quarter. Is there like a cost pass-through mechanism where there is an allowance where they allow cost pass-through?

No. But if you're a big player, you can hedge. You can buy forward and either you do it for this project or you do it in another project elsewhere, right?

I can't see your slide because it went to sleep. Yes. So yes, okay. Looking through for any more solar.

I guess there is. People are wondering about the economics of BESS and your tender process for that. How much of the entire cost would the battery of the BESS, the battery module, I suppose, be? And how can you differentiate yourself from other players, especially if, let's say, the battery module consists of the majority part of the COGS and understanding that there is probably only a few suppliers from China that actually everybody is looking into?

I mean, yes.

Or is it just a function of you having to lower down your IRR when it comes to quoting?

There are differences or they are differentiating factors in terms of technology as well. So when this time around, because it's the first time that Tenaga cost for RFP on battery, there's still quite a fair bit of learning curve in terms of how Tenaga should look at it and whether they did it correctly this time around. We think there's a lot of room for improvement. So the one that we tender is actually the more robust technology where it can serve as a self-sustaining grid. So minus -- I mean, I'm not a technical guy, but I was told that, that is a more superior technology. So when you submit your RFP, you could highlight this to Tenaga. And if they appreciate that, then they maybe they will award it to you if you are slightly higher than others. So there are many considerations. But having said that, I looked at the winning bids, they are just very, very low. Even if we key into our own financial modeling based on the bid prices, we find it not attractive from our perspective. So we accept the defeat, it's fine. We cannot get it. Even if they give it to me at this price, I wouldn't do it.

It doesn't make economic sense, yes. Okay.

And just bear in mind that because this is something very new, we are working with a Chinese partner that has a lot of experiences in battery. So we are very confident the purchase price of the battery cannot be any much higher than any competitors, that bidder for this project. So it cannot be just because of costs. It's got to be the expected returns.

Yes. Just a general one. Mr. Louis Cheong, thanks for raising your hand, but it's difficult for us to allow you to talk. Do you mind typing in your question into the Q&A box and then let us know what division or specific business unit, that will be great. So next.

So next there's just one last question here that come up. You mentioned capital commitment in 2026 would only be MYR 67 million. If that is translated to your cash from operations in 2025, that is only 10%. So on top of all the cash from operations minus your capital commitment for 2026 and current cash balance, you're looking at about MYR 1 billion of bullet in your balance sheet at the moment. Would that be sizable enough for you to go for new projects and what sort of new projects? I think you mentioned -- you highlighted a little bit actually here.

I mean In the RE space, MYR 1 billion is very small. Nowadays, if you do, let's say, for example, if you do a 200-megawatt hydropower, let's say, you do it in Sarawak, for example, at today's cost, it will be more than MYR 2 billion, at least MYR 2.5 billion to MYR 3 billion. So it is very expensive to build now. So in other words, even if I have MYR 1 billion cash, I can only invest in one 200-megawatt project. That's what it means, all right? So that's why we are still strengthening our balance sheet. In the absence of any new project, we will continue to conserve cash, strengthen our balance sheet so that we can take advantage of opportunities when they come. But having said that, we also acknowledge the needs of our stakeholders. So we have again guided that we will continue to step up the dividend, and we have been doing so for the last 5 years. If you look at the table. And we will continue to do so. So it's striking a balance between conserving cash to take advantage of future opportunities and also returning cash to the stakeholders and shareholders.

Okay. Okay. There was questioning some of the slides because he missed out. So I was scrolling through to see whether -- yes, yes. So anyway, we come to that later when we have the full...

Yes. Just a commentary on what you just mentioned just now. I guess I just want to highlight. So again, where you mentioned, in light of this, why not consider raising the dividend payout to 30% to 40% of annual EPS, particularly given the perceived lack of sizable investment. Alternatively, could the group consider a more meaningful increase in the step-up dividend as MYR 0.025 increment is very modest.

Yes. I mean, we will take note of what you all say, I will feedback to the Board and the Chairman. But we do factor in all these needs, all right? Sometimes it's striking a balance and that balance may not be the kind of balance that you are looking for. But just rest assured that we will continue to step up and at the same time, continue to strengthen the balance sheet. And we will stop putting money into smaller investments and noncore investments unless it's absolutely necessary. What we have done, we will see how to either we can continue, we can unwind or we can exit partially or just stop investing and let them run on their own.

Yes. I just said striking a balance between dividend payout and capital commitments are...

Yes.

Okay. Shall we move on to ...

What do you want to move on to...

Packaging.

Packaging. Yeow Young. Could management provide an update on the competitive landscape and overall industry condition?

The competition is still extremely keen on the flexible packaging side, okay? And it's more keen at the converter side. So upstream, because there are fewer players, so competition is less keen. Converters, they are plentiful. And it will continue to be extremely competitive, especially from players in China.

But with resin prices now potentially going up because of -- so how do you think that will change in light of.

Well, if it creeps up, we have to try to pass on. So far, it has been steady, except until the war. Yes, we do expect it to come up to creep up. And when it creeps up, we will try to adjust our selling price.

Yes. So there's a question from an anonymous attendee. Does the Packaging division have plans already using recyclable laminates or post-consumer resin? There's a big push from Nestle to use this.

We do have a solution. But just bear in mind that whatever multinationals push for, they may not have the appetite to pay the cost. So we must be realistic because we know they are also realistic. What you read from their website may not be actual practice that they do because nobody wants to pay for it, right? So there are these megatrends. We have a biodegradable solution. So if Nestle is willing to pay for it, we are all ready. And we have started with a few MNCs. So we have started to roll out some of these products. But the take-up rate is not as fast as you thought it would given that these multinationals openly declare. So there's a mismatch between rhetoric and reality...

When it comes to dollars and cents.

Yes, because consumer products are very price sensitive, right? The biggest squeezer in price are always the multinationals. They are not the generous lot.

Because they want to maintain their margins as well.

You ask any packaging company here, who squeezes them the most. It's always Nestle.

Yes. Not surprised actually. So continuing with Wyan's question, how is the wholesale market and supermarket chain customers in Australia performing? How frequently do they typically replenish inventory. If available, could the management share the number of customers in the Packaging segment as well as the top 5 customers by name or geographical contribution, including the percentage contribution?

That's too sensitive to disclose that. Anyway, when it comes to Australia, the bulk of our Packaging materials sold to Australia is not plastic, it's paper bags. Paper bags are sold mainly to Australia and New Zealand and U.S., and we are now trying to break into the U.K. and Europe as well. So that one is doing quite all right. Whereas for plastic, it's mainly Malaysia in this region mostly. With some exports to maybe African countries as and when the demand is there.

Main competitive, Rondy?

Could management provide the current utilization rate for Hexachase Stenta. Please share the figures, both including and excluding the new capacity as we would like to assess the extent of which the additional capacity has been absorbed.

We have more or less -- I mean the last round of expansion is quite a big expansion. We more or less have doubled our capacity on the LL side and also on our paper side. So on the flexible plastic packaging, I would say today's utilization rate is probably only around 60%. And for the paper side, we are doing much better. We are probably doing around 70% to 80%.

Paper, 70%, right?

70% to 80%.

Okay. Okay. Another question is the Packaging division hit record revenue in 2025. With the new 20,000 tonne capacity expansion coming online, what is the target contribution for this division in 2026? Can the growth realistically cover the potential dip in hydro earnings?

Okay. The expansion has already completed -- was already completed last year. This year, there's no new capacity coming on stream for Packaging. All the expansions, for a little bit here and there, right? There are some debottlenecking. But by and large, they've already been completed. As I said, the capital commitment that you see in the slide where I still have around close to MYR 20 million of cost. That is the tail end of the payments, all right? But it doesn't relate to new expansion. So there's still MYR 26 million. In fact, part of it, a big chunk of it is actually relating to the factory -- cost of the factory that we've built. So there is no new expansion, so to speak, in Packaging. These are the tail-end costs that we have to pay or rather we have budgeted for whether we effectively spend it or not, there's still a question mark. And the renewable energy MYR 18 million is to complete the Maldives and also the Tronoh project. So over here, there's really no expansion, okay? If anything, it will be an increase from this MYR 67 million. If we secure a new project, then it will be. So looking across all our divisions, the only potential division that will undergo massive expansion will be RE.

So for the Packaging division, how many percent are the top line exposed to U.S. exports?

I mean, our sales breakdown is more or less about 50-50 in totality. And we do face a lot of pressure when ringgit strengthened against the U.S. dollar. So this year, as I've said, it will be challenging. We still have currency headwinds. Now raw material price may creep up. There may be some margin squeeze because it takes time to adjust prices. Let's see how the thing pans out, but it will be a challenging year.

So 50-50 means 50% export to the U.S., U.S. specifically?

U.S. will be a fairly big chunk out of the exports.

Okay. Okay. Any more Packaging, Packaging. I don't see any more. Okay, a lot of general questions. I want to sneak one in for the RE because I saw one, okay. So this is a question for YS Adam. He says MFCB's intention is to be a pure RE player. Can you explain CapEx in each division for FY '26? I think this is a good -- this is the capital commitments, but do you have -- I thought you have another slide on -- he's asking for CapEx for each division for FY '26.

FY '26, this is FY '26. This is what was committed as of end of 2025. So if we have not secured anything, we won't put it in there. So along the year, if we secure something, then we will put it, right? So you may see it in the following quarter results briefing. The moment that we secure it, we will announce it anyway, right? So then you will have an idea how much we will spend. In absence of that, literally this year, there's not much of a CapEx.

Okay. Okay. We go to Resources.

I don't know, resources. So you want to go?

Resources, Yeow Young at the top. You go first.

Okay. So could manage -- for Resources, could management provide an update on the competitive landscape, overall industry condition for the Resources division?

The -- I mean, there are only effectively 3 players in Malaysia and maybe one big player in Thailand, Mainland. And many, many small players in Vietnam, all right? Historically, we used to compete with each other. But in the last 2 years -- over the last 1 to 2 years, we start to see competition from China, especially lime producers that sells to Chinese owned mines. We also do see competition from players that set up operations in the vicinity of that customer. It's a local kind of supplier. So in some ways, we are disadvantaged. So to grow revenue, to grow volume is not going to be that easy. We are now trying to defend our volume. So our run rate is around 35,000 tonnes a month, and we hope to defend that throughout the course of this year. So hopefully, we can come in between 35,000 and 40,000 tonnes. It will be competitive. And our exports are also in U.S. dollar term. So the strengthening of ringgit is negative to us. The disruption in supply chain, the volatility in the freight rates are also a risk to us. Of course, it can work either way. Sometimes it's good, sometimes it's bad. So insofar as our long-term customers are concerned, we try to negotiate so that there is some form of a pass-through cost either from fluctuating fuel costs or fluctuating foreign exchange rates so that we try to at least secure a decent margin.

Right now, what would be your comfortable margins that you are...

Well, I mean, it has dropped from the peak. The peak was 2024, all right? If you go back to what I said back in 2024 is we have caught up with our price adjustments and cost starts to moderate. So the reverse happened, our margins start to expand because we don't immediately pass back the cost savings to the customers. So now that the cost and the currency work against us, so now it's reversing again, all right? And if you ask me what we make per tonne today should be the minimum. We try to at least defend that, try to at least defend that.

Single digits, low double digit.

We try to make at least MYR 50 per tonne. We try to make at least MYR 50 per tonne. And it's very hard to put it as a percentage of revenue because every customer's delivery method is different. So if let's say, you sell to a customer that wants paper bags packaging, that wants -- that has very freight cost because it's somewhere in Timbuktu kind of thing. Then, of course, the margin as a percentage of sales is very low. And the margin in a domestic customer looks high. So we don't look at that percentage. We always look at it is what kind of profit we can make per tonne once it leaves the factory. The rest is you top up the cost. You want it packaged in paper bag, then I charge you paper bag. You want jumbo bag, I charge you jumbo.

Can you pardon my ignorance, but can you ship in bulk? I mean does it.

We do.

You do. That's the cheapest, I guess...

Of course. The margin percentage of sales. Because we -- in this business, the product selling price is not high. Logistic costs can be like more than half or even more than 50% -- more than 50% of the cost. So you sell it for MYR 400, MYR 200 transport cost. So if somebody buy ex factory from you then, you sell to him MYR 200, you make MYR 50 whereas you make MYR 50 versus MYR 400 versus make MYR 50 over MYR 200. So the margin is very different.

I understand. So how many -- roughly -- how many customers do you serve now? Who are the top 5?

I won't give names, but I will tell you...

Region, maybe regional.

Of course, Malaysia accounts for around 40-ish percent of the sales, okay? And within Malaysia, the bulk of the customers are the steel companies, mainly the steel, mainly the steel, water treatment, of course, liners... And then in overseas, it's mainly steel and mining companies and the bulk of it go to either Australia or Indonesia. India used to be a big customer, but because of the logistic cost, now logistic cost is way higher than the selling price. So there's no way you can sell. So India used to be 25% of my sales. Now it's almost 0. If there's anything, it's a little bit depending on the freight price. The more the freight price comes down, we can sell, we sell.

I see. Liners just renewed the contract yesterday, 10 years. So another recurring customer there.

We have been selling to them. So it's not a growth.

I understand. BAU. Yes, yes, yes. Okay. Anything else on resources? If not, we can move to Edenor, what do you think, Randy?

Yes, let's go to Edenor.

Okay. So please, for you.

Okay. Edenor turn around, a question. Given the share of losses improved from MYR 35.1 million to MYR 15.7 million in quarter 4, is the plant now operating at a cash neutral level? Specifically, what is the current utilization rate target for 2026 required to reach full accounting breakeven?

Maybe I break this into 2 parts. Assuming nothing goes wrong scenario, okay? Assuming nothing goes wrong scenario is we should be able to operate at around 85% to 90% capacity utilization. If that happens, we should be cash flow positive. And assuming there's no more new challenges from worldwide industry developments, assuming there's no more changes in the export policies and biodiesel mandate of Indonesia. This month's reference price shows that there is quite a sharp increase in many oleo products -- in many palm oil raw material costs in Indonesia. So it will change the dynamics again. And there are antidumping duties being levered against either Indonesia or Malaysia players or both, all right? The most recent one is one of the oleochemical companies in the U.S. actually filed an antidumping application to both Indonesia and Malaysia on fatty acids. So that is still ongoing. So we don't know how that will pan out. And if something comes out of it and there's antidumping duties, so it will again change the dynamics. So it is very volatile, right? But assuming nothing happens, then we should be cash flow positive. But the problem is we do have occasions of plant repairs that are unanticipated, unscheduled. So that could disrupt it. And to what extent it can disrupt, it's a question of how long you have to shut it down for, all right? Some repairs can take 1 day, 2 days, then that's fine. But if it happens every week, then it's also a problem, even though it's 1, 2 days or sometimes we have to shut down for a week if there are no spare parts. So all these are very uncertain. From our perspective is we have to solve this. We need to solve this, okay? We need to stop the bleeding even if it means cutting loss and we are working towards that direction. And it could be in -- there are many, many potential scenarios, right? It can be a sale, it can be a joint venture, some form of collaboration. The idea is if we can give some cost advantage of raw material purchases and if we can sell at a slightly higher price than it will work for us. Because there are 3 factors that drive profitability. Can you buy cheaply or not given the export tax of Indonesia? Then is your past stable? And third is which market we sell to? Some markets are cheap, low price than the others.

So that's, in a way, it's not really a fully transparent open market for all these different types?

Because it's defaulted by the various tax structure of each and every country, right? The anti-dumping duties, they are different rates for different players and different rates for different countries. So -- and that could change again. So when you change, all industry will have got to evolve to handle the change. So the most recent one is the anti-dumping duty application in the U.S. So the one then I think the [ big one ] is sometime this month.

Okay. Okay. So there was a question on what will be the breakeven point of -- versus the utilization rate of the Edenor plant so that you can -- I mean, you did say ...

If I can hit, 85%, we should breakeven.

Okay. Just now you mentioned about measures that management are taking to sponge losses. Can you elaborate on that?

Well, of course, you have to -- okay, I just want to give you an idea how sensitive the cost is to utilization rate, all right? If I produce, let's say, 90% of capacity, my fixed overhead absorption could be MYR 700 to MYR 800 per tonne, If I produce it at 60%, my factory overhead could be [ MYR 1,000, MYR 6,000, MYR 7,000 ] per tonne. So that difference will more than wipe up any contribution margin that you had. So the fixed cost element is very, very high. So like what I said in the past, plant stability is something that is at least considered within our control, all right? We can't change the export policy on palm oil in Indonesia, right? [ that's positive ]. We can't change the biofuel mandate. So this is something we have to live with, right? And selling price at the end of the day is market price, goes up and down, demand -- driven by demand and supply, because these prices will still be influenced by what the commodity price is. So if price down a little, price will come down. If CPO goes up, then price will go up.

Okay. Looking through, I don't know. No, actually, they wanting to know where to buy the veggie, I'll come to that later, veggie for the food security. So I don't have any more -- do you have any more, I don't know? I don't see any. I have answered the last one.

Yes. I mean there's a lot of comments about a lot of concern about how you can structurally pivot to remain competitive against all your Indonesian peers who benefit with all these massive cost advantages. Yes, a lot of -- no comments and worries, I suppose, it concerns.

We hear all these concerns. Nobody feels it more than we do because we had to put cash in. And we are trying very hard to solve it as soon as possible. We hear you. So we will act commitment. The idea is to stop the losses even if it means cutting loss...

Is this combined as part of your -- because there's a question here that says company may exit some noncore businesses. Can you elaborate more on this? There's food security. I know it's not related directly to Edenor, but what is the basket where you -- as long as it's not RE, it is considered noncore, how do you define it?

For now, the core is RE .And of course, resources is considered as core. Packaging, we will eventually float it, spin it off. We will continue with our hospital. Food security, we will wind -- roll back. We can talk a little bit about Food Security. Do you want me to talk about it now?

I think -- yes, you can talk about it because, yes, I think it's a good segue to Food Security, sorry.

Okay. Food Security is -- we realized that we actually have not yet developed a cost-effective and sustainable way of doing greenhouse farming. It's still stable, the cost is still high. And therefore, we are kind of scaling that. And until the management in Johor have stabilized the technology, get the cost structure right before we even talk about further investments. In the essence of that, we are not going to invest any more.

Okay. So whatever has been committed will just flow through. It's just that new commitments will...

I mean, we have put in MYR 25 million investment to buy the 40% [ effective ] stake. So we are trying to track that. But if they have not yet developed the process right, then we will not put in new money.

But this MYR 25 million does not include what you have put in for Cambodia, right? Cambodia is a separate?

Cambodia is a separate thing. So Cambodia, also, we are looking at it. We are trying to rationalize the operation as well. We are not completely happy with how the yield curve is growing on coconut. So we are evaluating our position, and we are also not aggressively putting money inside. Macademia side is still okay. So we may continue with that investment. But overall, food security is not regarded as a core business. So whenever it's not core, we will either look at it -- we will not put in a lot of new money, number one. We are also looking at potential exit, like, for example, Edenor and -- or we will even do a listing or a spin-off or some form of a joint venture that better people run it. That's what it means by non-core.

I think it was a good question to categorize what is core and non-core. Okay. And yes. So it's related roughly when will Food Security division contribute profit? I think very hard to answer, right?

Yes. It's hard to answer because in all these biological assets, yield is, I would say, the most important part of the equation, whether it is -- whether it commercially makes sense or not, all right? And so far, the new curve growth is not 100% to our satisfaction. So we have got to start to look at it, should I even put in so much money there.

Here's my question to double-click on that. So when you say yield curve is not to our satisfaction, what is the benchmark? Is there like an industry benchmark?

Yes. We do.

So someone like a UP...

No, no, because we're harvesting one asset, so it's slightly different. So we are comparing with the what the Thai's are achieving and what the Indonesians are achieving because we do have all this -- we do have reference points, okay, for this stage between what kind of productivity should you have? Of course, when it's young, the yield is obviously low. Like now, we're also monitoring our dividends. So, so far, the dividend looks okay. This time around, it's going to be full scale harvesting means come July. So we are not monitoring the flowering process because now we are in March. So any fruits that are formed in April will be harvested in June and July. So we are monitoring that. But of course, the timing is a little bit off because [ year-end ] prices have come up substantially. But even at this price, we can still make money. So we are not too worried about that. And then on the greenhouse side, we are rolling back until they get the formula right because if they can't get the cost structure right, and we cannot stabilize the technology in terms of the SOP on how you plant and how you fertilize and how you rig it. We are successful in many occasions, but there are blips. Suddenly, I got this insect attack. So the question is why? Why first round [ came ]? Why second round [ got ]? So we have to do a lot of trial...

Is it an empirical process that means is there like a process of elimination or is this just try an error and then...

Because greenhouse environment is different from netting environment, all right? So they are quite new -- they are new to greenhouse. They are very good in doing netting, okay? So -- but if we believe that, that is the future, then they have to keep trying on the greenhouse. So while they are trying, we say stop all extension and do at that small area first.

Focus on this.

Until you get it right, then only you sit down and talk about whether you want to expand and how to expand and whether we should even float it off and raise money from the market or whatever, but it should not be too much.

I understand. Food Security, since we're on it, Okay. So Wei Yong has a question on the Cambodian coconut operations. When will it deliver meaningful contribution, significant enough to be disclosed separately?

Because now Food Security has been shut-off and rollback, unlikely it will be disclosed as another core business, not in the near future, not in the medium future. As I again earlier mentioned, the coconut yield curve is not panning out to what we expected. So we are giving a little bit more time to see if the yield curve improves. If the yield curve doesn't improve, we will have to make different arrangements.

Okay. Then in terms of challenges facing CSC, it appears that competitors such as farm price has been expanding aggressively through the network sales channel, how does management view the competition -- competitive positioning and the pace of expansion in comparison?

Our wholesale side is growing. It's not as profitable at farm price. And this is something that we are pushing management to do better, right? The palm pricing is to bring the business a lot faster in Southern Malaysia and Singapore as well. So we have asked our team to beef up on the sales and marketing side. Effectively, we do similar things effectively. And interestingly, it's because of this farm land that we have in Mondulkiri, we have this opportunity to do wind power.

If not then. It is killing more birds with one stone.

Well, because wind power doesn't require the plan but it is scattered on a big area. The actual land may not be involved because you have a big distance between 2 turbines.

So you don't draw...

In terms of actual physical location of the turbine, it doesn't take up a lot. So we are working on that. We are now working with the -- we are now doing some feasibility to see if it's commercially viable and that should start soon.

Okay. With the land size that you guys are looking at for this, what kind of like say, megawatt for the wind?

It will start smaller. Maybe 100 to 150 first, but the site if we really want to develop the whole thing can be a lot, but ultimately, we must serve the needs of Cambodians and we will start no point talking about 500, 1,000, we will start talking about maybe 300 first and then maybe separate into 2 phases.

Right. And your customer would still be [ EDC ].

So we need -- it's just the beginning. So we are going to start -- at least we must have -- we must first do the feasibility study. So if it works then we can talk to [ EDC ] to see if they can get one more power, renewable power.

And what kind of CapEx like per wind turbine?

Per megawatt capacity, it will be around 800,000 to 900,000. So roughly 300 megawatt will be $250 million.

Come again.

US dollars.

Not too taxing on CapEx in a way.

We have 1 billion...

It is still taxing. I mean $250 million..

Comparatively to hydro or...

And the gestation period.

Yes. What's the typical gestation period for, let's just say...

I mean because you got to assemble -- I mean you can fabricate the turbines and then you ship it and then you install it. But it will still be shorter than the hydropower. Also the cost is lower, but efficiency is also lower compared to hydropower.

Understand. But also -- but it's in the middle, will it be faster than, I guess, gas-fired plant? I'm pretty sure. Gas-fired about 5 years, I guess.

Yes. And I think it will be late 2030.

2030 you mean?

Yes, late 2030.

And I suppose the tariff rate and all that is -- should be equivalent to Don Sahong?

I think every country has -- they don't talk about market tariff. They talk about how much return they want to give. It's just the same. That's why you look at all the hydro tariff across all different -- give you 12%, 13%...

But will they -- will the contractors really be that transparent about the cost?

For developers who [ win ].

Tell them, right?

Tell them right and negotiate with the buyer of the electricity. So if our cost is so much, then you just talk to them and then it must be somewhere around there. Because nobody would give too high return.

Yes. I understand. I understand. So before we move out of Food Security, this is if we want to support MFCB's veggies, where can we buy them? Which retailer carries them and what brand are they?

It's called Farm Fresh.

Farm Fresh. They use the MFCB dividend to buy the veggies, I guess.

Some actually under the [indiscernible] market.

So it's white label. Okay. Okay. So no particular -- Jaya Grocer, AEON. No. I mean the retailers that carry them, Jaya Grocer, AEON.

No, no AEON. [indiscernible] in Singapore.

So just you mentioned on the wind turbine rate because Don Sahong took almost 10 years to commercialize just now on the wind turbine, if, let's say, everything goes according to plan, from initial until commercialization is 2028, 2029, late 2020s, which is basically 3 years from...

Everything goes accordingly. But we haven't -- I mean, there's nothing to announce [indiscernible] if anything, it will be in 2030s. So a lot of projects in time. So we are also exploring some existing ones. Either getting a stake in it or investing a stake or even buying of the rest of an existing power plant. Those are various things that we are looking on.

Okay. I think a lot of nuggets there.

Yes, that's right. Yes.

Next, I guess in line with Sunway Healthcare closing yesterday, any update on the progress of your building hospital?

We are about to award the tender. We have entered into basically the final, final round of discussion. We should award it sometime this month.

Is it complete? Or is there like different packages, equipment?

Building, building, the building. So once we award it, we are hoping to start work in the following month. So hopefully, we can start work in April [indiscernible].

The construction of the hospital.

And that will take around 30 months.

3-0.

Yes.

Okay. Now a lot more general questions.

Yes, I think we can go there.

Yes. So the first one, yes. I link these two together. This one says Mr. Goh seems to be buying every day. Is there a general offer on the table -- potential -- is there a general offer potentially on the table? And then the other one is, why is there no share buyback from the company despite share price hitting 5-year low? So I think it can be lumped together.

I think -- I mean, okay, whether it's share buyback or Mr. Goh buying, I think you can see a pattern. And the pattern is if the price is low, he will start to buy, but he doesn't influence the price. So every time he buys is relative to the market volume is small. So in other words, it won't influence the price, all right? And that's how he does it, whether it's he buy or the company buys. So we are not trying to influence the share price.

What's the current free float? What's the current free float percentage-wise?

If you strip out his, I think the free float is more than 60%.

I guess people are asking this question because the amount to the, I think, general offer is really almost there.

Yes, yes, yes. No, I mean [indiscernible] has to exceed...

I don't think the idea is to cross it. He's now under the tripping clause. So every year, he cannot go more than 2%, right, because he has already crossed the 33% threshold after the last round. Now the next threshold is 51%. And in between, he's got this creeping cross every, don't know how many 6 months or a year, he cannot cross 2%. So he does buy and share buyback will affect that as well.

Yes. But do you retire normally -- has the moment the share buyback happens, do you retire the shares?

No, we don't retire the shares, but it's still calculated based on the net outstanding. So his stake will actually creep up with share buyback. So he's got to monitor that carefully.

Okay. I just want to sneak in one question since you mentioned that there's potentially either a JV or maybe even a sellout for Edenor. Is there a risk of providing a full impairment of the investment? What is the current book value?

It depends on what we do. The current book value is MYR 137 million. That's based on -- MYR 136 million based on 31st December 2025. You can actually see it...

On the balance sheet, right?

Yes, the bulk of it. The rest of the associates are not so much.

Okay. Pop up this question since we answered the share buyback. Is there a risk of privatization? [ DKSH #2 ].

Never discussed, never talked about, not even an idea that we talked before. So I don't think so.

Okay. Maybe just 2 more questions. Rondy?

I don't see any more -- I'm still looking...

There's one -- I think it's quite a good one from [ Bin Chong Loi ]. There's a green color. There's a general question from [ Loi Big Chong ]

Why did you laugh?

Mr. Yeow mentioned that the company will focus on core RE business for now while scaling back investments in noncore segments and potentially exiting certain areas. Can you elaborate on the reason behind this apparent shift towards a more cautious and more constrained investments and growth strategy? Additionally, could you be more specific about noncore areas that may be scaled back or considered for exit? I think I partially answered that, but maybe why the shift now?

Well, I mean, we -- after going through all this, we realized that it's not so easy, all right? And it's better to do something that we know better. In fact, that has always been what we believe in. It's just that the group -- I mean, Mr. Goh is very entrepreneurial. So that's how he built businesses in the past anyways, right? And in the past, he has successfully built businesses from very small investment into big -- into businesses that worth a lot of money. It's always from a very small base, okay? And as we go along, then he will put in more and more. So we do want to like put in private. And then after that, create value and inject in at a high valuation. That's not his style. His style is let's take the risk together. Of course, you leave it to me to operate. So yes, we have tried here and there. And the world is changing. The world is changing too fast, especially on manufacturing. And we realize that actually it's now a lot more difficult compared to the past. So we decided, I think maybe we don't try to build so many new businesses, just try to focus more on 1 or 2 or fewer number. So right now is, of course, RE. Resources is core in the sense that it's very stable. It's very cash generative and it's very nonreplaceable, so to speak, because logistic, location, geography is very important. And we have good reserves at a very low price because we secured a long time ago. So that business is just pure cash [ counter ] in a way, no different from RE. Plant just keeps continue collecting money. It's just that power plant got expiry date 25 years that one don't have, okay? So we just keep it. And then when it comes to manufacturing, other manufacturing like packaging, equipment group and others, the competitive landscape is changing very, very fast, okay? So we do feel that we may not be able to do it well and the people may not be able to handle it that well. So we're going to look into should we even put more money into it. So if we don't, then you got to scale back. All right? You don't want to stifle them, you must well let other people do it.

And you still don't want to give false hope in the beginning.

Yes. So in that sense, we scale back, okay? We rather concentrate on something that is more within our control because in that like CSC, we buy, we are dependent on family to operate. It's only over time, then whether they can prove their worth, are they as good as what they say they are. So if they are not, then we better pull back, rather than calling with too many things.

I understand. I understand. So probably one last question for me and then maybe Rondy will wrap up. I'm trying to consolidate 2 questions. One is Mega First' share price has been hovering about MYR 320 over the past 5, 6 years. It appears to some investors as a potential value trap. What advice will you give shareholders who've been holding back the stock for 5 years and are considering selling their position. One more. Happy Chap Goh Meh from [indiscernible], funny question. At what price Mr. Yeow is going to purchase more shares of Mega First? So I combine it together. I guess one is asking what's going to sell, the other one is asking what will be the trigger price for you to...

I mean, I personally look at Mega First on a long-term basis. I mean I understand because I talk to investors, including Rondy and John, yourselves. You can summarize the negative thing into a few broad issues. Of course, U.S. dollar is one thing. But that one, there's nothing we can do about it, okay? We can't go up to say, can we change renminbi? You don't want a local currency for sure.

You don't want to keep...

You ask them to pay it also not possible, okay? So this is something that we can't change, all right? And if people sell down the shares because they take a view on U.S. dollar, that's a fair thing to do. It's for them to decide. And number two is, of course, we also understand that it's -- we are too diversified, right? The complaint is why you go into [indiscernible]. So that is changing, all right? That is definitely changing. Our dividend payout too low, okay, that will change gradually, all right? We don't like the dividend to be volatile. We want the dividend to be steady and on the rising trend until such level that we say, okay, I think we stop at discount payout ratio, all right? And then we monitor from there because ultimately, a lot of -- I remember what question being asked, you've got MYR 500 million cash in your balance sheet, why don't you give away? I mean, I can't even -- then the guy added by saying, I can't even imagine how to spend the MYR 500 million because there are just so few investment opportunities. I say -- but if you look at it in RE space, it's no, right? 100 megawatt is only MYR 1 billion. 200 megawatt could be MYR 2 billion. So having MYR 500 million cash is nothing in the RE world.

OpEX is everything.

Yes. And in RE, there are a lot of things you can do. It's a question of your risk appetite. If we want an IRR of 6%, of course, we can get plenty. But that's not what we want. We want higher hurdle rate, right? And we are willing to wait out given that our [ bullet ] also is not like unlimited. If I got $10 billion in my balance sheet, maybe I just do a little bit more aggressive investment. But I still have about $1 billion debt, all right? I may have $0.5 billion cash, but I still have $1 billion debt. So if we can tilt it to maybe $1 billion net cash, then there's wonderful position to take advantage of opportunities that come around. So dividend issue, we are addressing it. Overly diversified issue, we are in the process of diversifying it, all right? And we also understand the last one is on a single project dependency, right? We are so dependent on loans. So as I said, we are working very, very hard now. We are all channeling all our focus and resources to getting new RE projects, but still being disciplined in terms of what kind of required rate of return that we want.

Don't know what your hurdle rate is.

No point, right? No point. But if you really cannot find 2, 3 years down the road, then maybe we declare special dividend, I really cannot find. But not at this moment because our balance sheet is still geared.

Any last questions?

Last question from me is which one will come first, spinning off one of your non-core business like Packaging or you securing a new RE project?

I hope we will announce something on everything this year.

Remember 2 years ago, we started, right, what was your comment every quarter come, there's new shiny object.

I wish I can announce a project today, but the fact of the matter is that there are many, many processes to go through, all right, especially when it comes to RE. And then when it comes to like when we're going to spin off packaging, the time is not right because I told our top management team that if you only make MYR 21 million, don't bother because the moment you list, we are facing this compliance issues, integrated reporting. All ESG monitoring. I tell you, it will immediately set you back a few million in terms of additional expenses. If you make MYR 20 million straight down 15%. What's the point? What do you want out of it, right, to raise money? You got [ best of use ]. It's value destruction, right? Until you are reasonably big, let's say, if you can float it for between MYR 800 million to MYR 1 billion market, more reasonable to go listing and then you want to say I'm an MD of a public listed company. Goh, I'm worth MYR 100 million, MYR 200 million. But not time, but we are in the process of preparing all right because we still have quite a fair bit of things to restructure within the group, right? As you know, Santa is Santa, [indiscernible] they are minorities, they are management shares. So all this needs to be sorted out eventually before we go listing. But profit, we are not there yet. We thought we will be there after the expansion, but we are hit with a very big downturn. So from the peak of MYR 33.6 million PBT, it has dropped to close to MYR 22 million, right, last -- even lower than 2024. So we need to rebuild, but the turnover is rising. So at least there's a good start because if your turnover is down, that's even worse. Turnover is growing, but margin compressed. It doesn't matter. We just need to gain the market share first, right? I mean is it really there? That answer is no. We still enjoy about around 5% of PBT margin. It's not too bad. And that 5% PBT margin actually should be higher, if not because -- Yes because [indiscernible] has been expanding through that. So if we can restructure again, the profitability can change.

So may be...

2, 3 years down the road.

Any concluding...

There's one question that I'm not sure if you...

The D&O legacy when is it, right?

Okay. So there's a question, will D&O still -- okay, I'm trying to grammatize this sentence. Will the D&O still be the legacy investment for Mega First? I think maybe will it still be kept as a legacy investment, I guess.

D&O investment is definitely long term, right? It's been sitting there. It's gone up and down. In fact, in D&O's case, none of us sold. I mean, none of the major shareholders sold except for nonrelated to Mr. Goh. But as far as Mr. Goh is concerned, he didn't sell, right? In fact, he bought. So he takes a long-term view on it. Yes, there are certain things that could have been done better. But I think this third and fourth quarter results is kind of like setting them on the right path in terms of how you incentivize management to manage that inventory process.

Hopefully, now that it's done, hopefully, they will -- it up again. So it's Chap Goh Meh. I don't want to be holding anybody back. Thank you all for dialing in. I know there are some more questions that are there. I think overloaded [indiscernible] crack down...

The one we have to comply. That's why you can see the margin compression. Our logistics costs went up 20%.

Okay. So the answer for it. Wishing everyone celebrating Happy Chap Goh Meh. I hope you have a great dinner with your family. And see you again in the next quarter. Thank you, Rondy, for coming again.

Thank you.

Thanks guys.

Thank you. Bye bye.