Television and online retailer Momo.com Inc (富邦媒體) has turned conservative over the outlook of its investment in Malaysia, after the scheduled launch of its joint venture in the Southeast Asian nation next quarter was postponed.
“We are not certain if the joint venture can start operating before the end of this year... There are some details and uncertainties that we are still negotiating with our local partner,” Momo.com president Lin Chi-feng (林啟峰) told a media gathering in Taipei on Wednesday.
Momo.com, a subsidiary of the nation’s second-largest telecom operator, Taiwan Mobile Co (台灣大哥大), in February announced plans to set up a joint venture with Malaysian shopping mall operator Pavilion Trading Enterprise Sdn Bhd.
The proposed joint venture is to have paid-in capital of NT$400 million (US$13.23 million), with Momo.com investing NT$180 million for a 45 percent stake.
As Momo.com’s third overseas joint venture, the Malaysian investment is part of the retailer’s strategy to grow its presence in Southeast Asia.
The company formed its first overseas joint venture in Thailand in 2014 and the second one in Beijing in 2015.
Earnings from its two overseas ventures contributed about 10 percent to Momo.com’s net profit of NT$309.92 million last quarter, Lin said.
Momo.com had high hopes that it could start running a 24-hour TV shopping program, online sales and catalog shopping operations in Malaysia next quarter at the earliest so they could contribute to revenue this year.
Lin said the details of opening a TV channel have been settled, but other issues relating to operating a retail firm in a foreign nation still need to be sorted out.
He declined to elaborate.
Although the Malaysian venture has been stalled, the company will continue to seek cooperation opportunities in other Southeast Asian markets, such as Vietnam or the Philippines, Lin said, adding that he plans to go to Vietnam next week to visit local retailers.
Lin said the company expects domestic sales this year to outpace last year’s, supported by a recovering local economy and increasing cooperation with brand vendors, such as Microsoft Corp and South Korea’s Korean Ginseng Corp.
“Domestic demand in the first five months of this year strongly exceeded the company’s expectations,” Lin said.
He declined to offer an annual revenue target.
Momo.com’s sales grew 9.64 percent annually to NT$10.04 billion in the first four months of this year, its filing with the Taiwan Stock Exchange showed.
Shareholders of Momo.com on Wednesday approved the company’s plan to distribute cash dividends of NT$8 per common share.
That translates into a payout ratio of 94.67 percent based on its earnings per share of NT$8.45 for last year, and a yield of 3.64 percent based on yesterday’s closing price of NT$219.50 in Taipei trading.
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