Author Archives: rimaadmin

PCCS finds better fit in the healthcare industry

PCCS Group Bhd Malaysia has long been known as a garment manufacturer and a label maker, but as the second generation of the family-run business takes over, the focus of the group is beginning to change.

With nearly five decades of experience in making apparels, PCCS Malaysia has been a supplier to many brands including Puma, Adidas, Li-Ning, H&M and Decathlon. Apart from Malaysia, the group’s garment business is also present in China and Cambodia.

PCCS Malaysia is also one of the largest label and packaging makers in Malaysia, via its subsidiary Mega Label (M) Sdn Bhd Malaysia, which was established in 1987.

Supported by these two businesses, the group has been making over RM400mil-RM500mil in annual sales, but the turnover has been declining in recent years.

The group was not spared from the impact of the Covid-19 pandemic and has recorded losses in the past two quarters.

For the first nine months ended Dec 31,2020, PCCS Malaysia reported a net loss of RM2.81mil as compared to a net profit of almost RM6mil a year earlier.

The main issue with PCCS Malaysia is that its biggest revenue contributor – garment manufacturing – only delivers low single-digit net profit margins.

The label and packaging business, on the other hand, has been loss-making.

Group managing director David Chan Wee Kiang, who was promoted to the position in November 2020, acknowledges that PCCS’ low-margin conditions have affected the group’s earnings trajectory.

Wee Kiang is the eldest son of PCCS founder and single largest shareholder Chan Choo Sing.

Choo Sing is also currently the executive chairman of PCCS. The Chan family controls over 40% of PCCS.

Looking ahead, Wee Kiang believes that the group needs a new growth strategy.

“Diversification is the only answer, especially into high-margin businesses that deliver stable earnings, ” he tells StarBizWeek.

Hence, it is no surprise that PCCS Malaysia has announced the venture into new business segments since last year, namely, medical device distribution and hire purchase financing.“Both businesses would be able to give the group commendable net profit margins of 20% to 30%, as compared to the group’s current margin of below 5%.

“They will also be the main revenue contributors to PCCS Malaysia in the future. Within the next couple of years, the medical device segment is expected to deliver over 30% to the bottom line, while the hire purchase business could contribute about 20%.

“Nevertheless, I remain committed to the group’s existing businesses, ” he says.

In April this year, PCCS said it will be investing RM4mil to enter into the used vehicle financing and insurance business, focusing on the Johor and Melaka markets.

This business will be undertaken via Southern Auto Capital Sdn Bhd, a joint venture company in which PCCS Malaysia holds 80% interest.The balance 20% stake is owned by Justin See Kok Wah, who is an adviser to 365 Capital Sdn Bhd, a company principally engaged in the business of used cars financing.

Wee Kiang says the group wants to capitalise on See’s long-built experience in the second-hand vehicle financing and auto insurance business.

“We believe that the used car financing segment is under-tapped in Malaysia, hence we want to capitalise on the available market opportunities. The hire purchase business is expected to deliver its first profit in the first quarter of 2022, ” he adds.

As for the medical device distribution business, which was first announced in December 2020, Wee Kiang says it will take about two years to generate revenue and deliver its first profit.“For us to distribute medical devices, we need to first obtain approvals from respective medical device regulators in the markets we intend to penetrate.

“The approval process will typically take one to two years, depending on the jurisdictions, ” he says.

Last week, PCCS, via its subsidiary La Prima Medicare Pte Ltd Malaysia, entered into an exclusive agreement with Shanghai Shenqi Medical Technology Co Ltd to distribute the latter’s medical devices within Asia-Pacific, excluding China and Japan.

The agreement will be in effect until May 21,2023, and La Prima has the right to extend the agreement for a further two years.

The agreement allows PCCS Malaysia to distribute Shenqi’s medical devices related to cardiology or heart-related diseases.

These include medical diagnosis and treatment of congenital heart defects, coronary artery disease, heart failure, valvular heart disease and electrophysiology.

Founded in 2014, China-based Shenqi is primarily engaged in the development of minimally invasive surgery products and devices, enabling safer and more reliable cardiovascular surgeries. Its products are primarily designed for cardiovascular interventional and peripheral vascular interventional procedures.

“We are already in the process of getting Shenqi’s products registered in some of the Asean countries. We will make the relevant announcements when necessary, ” he says.

Given the rising cardiovascular diseases across the world, including among the younger population, Wee Kiang says this has created a huge market for innovative and niche medical devices.

“PCCS hopes to ride on this demand, in partnership with Shenqi.

“We aren’t just another company jumping into the medical bandwagon. We are serious about growing the medical business for PCCS, ” says Wee Kiang.

He also points out that among the initial products that would be distributed by PCCS is Shenqi’s self-developed drug-coated balloon (DCB) catheter.

The DCB catheter is an alternative to drug-eluting stents that are used to treat coronary artery disease. The product was registered with China’s National Medical Products Administration in December 2019.

Wee Kiang describes the DCB catheter as a “star product” of Shenqi in China, given the huge demand. He expects to replicate the success by introducing the DCB catheter to the Asia-Pacific markets.

In addition to the medical device distribution business, Wee Kiang says PCCS is working on developing its own medical devices.

“The research and development works are still ongoing, hence I could not provide more details. But once everything is finalised, this will be another good revenue stream for the group with higher margins as the products are developed in-house, ” he adds.

Wee Kiang’s ambition to turn PCCS into a diversified group is supported by its balance sheet. As of end-December 2020, the group sits on a net cash position, with almost RM60mil in cash and cash equivalents against RM53.1mil in total borrowings.

Its gearing ratio of 29%, which Wee Kiang describes as optimal, would also allow PCCS to seek bank financing when necessary.

This provides the group ample room to expand organically and inorganically over the longer term.

If you would like to have more information, you can contact [email protected].

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Will Obesity Reduce the Effectiveness of COVID-19 Vaccines?

A vaccine is typically utilized to raise neutralizing antibody levels in the body so that an individual can be protected. While there are several promising COVID-19 vaccines already in the final stages of clinical trials, there are also concerns on how effective those vaccines are in producing immunity to the novel coronavirus against patients battling obesity.

According to Chris Xu, CEO of ThermoGenesis Malaysia, “Researchers believe that due to increased production of leptin (which correlates with body fat mass) and fat, the obese population has a more difficult time gaining vaccine-induced antibody protection”.

In fact, people with obesity can often produce healthy levels of antibodies following a vaccine but still display less protection from a virus because of other inflammation-induced deficiencies in the body’s immune response. Generally, these inflammation-induced deficiencies can attack the vaccine and make it less effective.

That could spell trouble if the eventual COVID-19 vaccines induce a weaker immune response in people with obesity.

Make sure to watch what you eat and take necessary precautions to lose that extra weight during this pandemic!

Please let me know if you have any questions, contact us at [email protected].

Narrowed Arteries? Angioplasty?

Narrowed arteries in the heart causes blocked blood flow. Overtime this may lead to the weakening of the heart, which may lead to serious heart conditions or heart failure. Ever wondered how patients with a narrow artery gets treated? Angioplasty is a procedure used to open the narrowed artery (Coronary arteries) that supply blood to the heart. The newest way to treat this condition is by using drug coated balloons (DCB). The balloon is guided to the diseased site and is inflated. The drug (Paclitaxel) on the balloon will be released to the arterial wall to prevent future neo-intimal hyperplasia, in other words, to prevent future blocking. Have a look at the picture provided by our partner Shanghai Shenqi Medical Technology Co., Ltd. Malaysia on how angioplasty works!

Please feel free to contact me ([email protected]) if you need any further information.

Shenqi appoints PCCS as exclusive distributor for APAC

PCCS Malaysia managing director David Chan Wee Kiang said this agreement marks the first step of PCCS in the medical and healthcare sector towards a long-term strategic cooperation with STM.

KUALA LUMPUR: PCCS Group Bhd’s (PGB) wholly-owned subsidiary, La Prima Medicare Pte Ltd (LPM) Malaysia inked an exclusive distribution agreement with China-based Shenqi Medical Technology Co Ltd’s (SMT) Malaysia medical products within the Asia-Pacific region.

In this agreement, LPM is the exclusive distributor for SMT’s medical products, namely the drug coated balloon within the Asia Pacific, excluding China and Japan.

The term of the agreement shall commence on May 22, 2021 until May 21, 2023.

PCCS Malaysia managing director David Chan Wee Kiang said this agreement marks the first step of PCCS Malaysia in the medical and healthcare sector towards a long-term strategic cooperation with STM.

“The agreement we signed today is a result of many years of groundwork, research and trials.

“We aren’t just another company jumping into the medical bandwagon. We are serious about growing the medical business for PCCS Malaysia,” said Chan in a statement today.

LPM was incorporated in Singapore on June 26, 2020, and is principally engaged in the wholesale of medical, professional, scientific and precision equipment.

Founded in 2014, STM is primarily engaged in the development of minimally invasive surgery products and devices, enabling safer and more reliable cardiovascular surgeries.

Its products are primarily designed for cardiovascular interventional and peripheral vascular interventional procedures.

STM’s current star product in China is its drug-coated coronary balloon catheter which has obtained the National Medical Products Administration (NMPA) registration certificate in December 2019.

“We are already in the process of getting STM’s products registered in some of the South East Asian countries. We will make the relevant announcements when necessary,” said Chan.

This agreement will not have any material effect on the earnings of PCCS Malaysia for the financial year ending March 31, 2022.

STM has completed several rounds of investments from reputable investors since its inception

These include Hillhouse Capital Group, LYFE Capital, 3H Health Investment and Hardy Farm Ventures among others.

Please feel free to contact [email protected] if you need any further information.

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How Does Air Pollution Affect Your Heart?

Constant exposure to ambient air pollution (AAP) and particulate matter (PM) is found to be associated with adverse health effects, one of them being cardiovascular diseases in Malaysia. Cardiovascular deaths are shown to increase when acutely exposed to particulate air pollution. Plausible mechanistic pathways of air pollution causing cardiovascular diseases are enhanced coagulation, vasoconstriction, and the promotion of atherosclerosis. Therefore, it is important to keep the environment clean from pollution for our generations to come. Although the technology to 100% incorporate the use of clean energy is currently hard to obtain, here at La Prima we try our utmost best to find ways to rely less on carbon energy.

 Should you need any further information, please do not hesitate to contact me ([email protected]).

PCCS teams up with Shenqi Medical to seek a grand blueprint of medical health in Asia-Pacific

Shanghai, China (Dec 15): PCCS Group Bhd Malaysia (PCCS) and China’s Shanghai Shenqi  Medical Co, Ltd (Shenqi) today announced the signing of a memorandum of  understanding (MoU) to cooperatively pursue healthcare business opportunities within Asia-Pacific. The partnership is intended to develop the commercialisation of cardiology-related medical device technologies by leveraging the strengths of both companies: Shenqi’s capability in developing innovative medical devices complements PCCS’s Malaysia capabilities, experience and reach within the Asia-Pacific market. This cooperation will also enable PCCS Malaysia to strategically position itself in the medical and healthcare sectors.

“As a hi-tech medical device enterprise, we have been focusing on the research of high-value medical consumables since our establishment. We sincerely hope that more patients with cardiovascular diseases will benefit from the innovative products developed by Shenqi. In August this year, we also completed a series C financing of several hundred million yuan to further develop and market our existing products,” said Dai ZhiHao, spokesperson of Shenqi. “PCCS Malaysia has been profoundly involved with conducting businesses within the Asia-Pacific region for many years … Therefore, having a profound understanding and strong influence over many different market segments within the Asia-Pacific region. With the help of its market influence, we hope to  promote our overseas market layout through its contacts, channels, public relations,  mature management team and market penetration, so that the medical technology  ‘created in China’ will go abroad and benefit the patient groups in the Asia-Pacific region and even other regions.”

“In recent years, China’s medical and health technology has been developing rapidly. We are very optimistic about its rapidly evolving scientific research capabilities and have been looking for exceptional business partners. Shenqi’s corporate core values, strong product development and innovation strength matches our corporate development philosophy and strategic designs. We are honoured to have such an in-depth cooperation with Shenqi to help expand their product application market,” Chan Wee Kiang, spokesperson of PCCS Malaysia, said at the signing ceremony. “As a diversified international trading and investment company, PCCS hopes to create a better world through investment. We are also exceptionally honoured to be a bridge for the trades between China and the Asia-Pacific region, and to also support Chinese companies to further explore and achieve mutual benefits, obtaining a win-win situation.”

This cooperation is the first step taken by PCCS to venture into the medical and healthcare industry, and to also initiate a long-term strategic cooperation with Shenqi. In the future, the two parties will delve deeper into the medical and healthcare field to undertake more diversified and in-depth cooperation.

Investors can refer to PCCS’s Bursa Announcement for further information.

 If you require any further information, feel free to contact [email protected].

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