This article first appeared in The Edge Malaysia Weekly on April 22, 2019 - April 28, 2019

MEDIA Chinese International Ltd (MCIL) is mulling over a plan to sell Nanyang Siang Pau’s office building, together with the land it sits on, and relocating the publication’s operations to Sin Chew Media Corp’s headquarters, according to sources. The proposal to consolidate resources is prompted by the challenging media landscape, they say.

“Nanyang Siang Pau’s team might be moving to Sin Chew’s office as early as the third quarter this year, but there has been no confirmation as yet. The employees have yet to receive any notice,” he tells The Edge.

“Internally, they have been talking about it since last year, even two years ago, but nothing has materialised. However, it seems that this time, it is more likely than ever to happen,” says another source.

When contacted by The Edge, MCIL executive director and group CEO Francis Tiong did not confirm or deny the speculation. “Thank you for your email and interest in us. Please be advised that we don’t comment on rumour that has no basis or evidence. We will only act and make the necessary announcement in accordance with regulatory requirements,” he said in a short email reply.

MCIL, which is dual listed on Bursa Malaysia and the Hong Kong Stock Exchange, controls four local mainstream Chinese dailies — Sin Chew Daily, China Press, Guang Ming Daily and Nanyang Siang Pau.

The offices of Nanyang Siang Pau Sdn Bhd and Sin Chew Media Corp Bhd are in Petaling Jaya, in SS7 and Jalan Semangat respectively. MCIL’s Malaysian headquarters share Sin Chew’s premises.

A quick check of MCIL’s 2018 annual report shows that the Nanyang Siang Pau land, on Jalan SS7/2, had a carrying amount of US$9.73 million or RM40.25 million. The 6.19-acre freehold parcel was acquired in 1994.

From a cost-cutting perspective, it makes sense for MCIL to relocate the Nanyang office, opines Dr Chang Teck Peng, senior lecturer at the Faculty of Communication in Tunku Abdul Rahman University College.

“This is a necessary move. MCIL is trying to revive Nanyang Siang Pau as a business newspaper. If its direction is to do a weekly publication, Nanyang’s workforce does not have to be too big,” he tells The Edge. “The marketing, circulation and many other departments can be merged with that of Sin Chew Daily. They don’t need to occupy so much space — just one or two floors should be sufficient.”

MCIL slipped into the red with a net loss of RM44.36 million in the financial year ended March 2018 (FY2018) — its first financial loss in 16 years — compared with a net profit of RM58.54 million a year ago.

Chang says the disposal of the land could lift MCIL’s financial performance.

“Media Prima and The Star have been divesting assets to improve their cash flow. I won’t be surprised if MCIL follows suit,” he notes.

A current affairs commentator concurs. “Nanyang Siang Pau has been making financial losses for many years. It needs to transform and cut costs urgently. I think relocating the office is a possible move. At the very least, it can save on some water and electricity costs.”

Although the parcel is in a good location, fronting the Federal Highway and next to Sunway Serene, he says MCIL needs time to identify the right buyer.

“Yes, the land is quite valuable, but I don’t think the disposal will happen anytime soon. Like it or not, this is a 25-year-old office. Who would buy it when the property market is so weak?” he asks.

A check on the Companies Commission of Malaysia (SSM) website shows that Nanyang Siang Pau’s net loss widened to RM916,000 in the financial year ended March 31, 2018 (FY2018), from RM365,000 in FY2017.

The daily has been bleeding for a number of years, reporting a net loss of RM4.12 million in FY2014, RM3.81 million in FY2015, and RM3.92 million in FY2016. Its revenue has been on the downward trend for at least four consecutive years, slipping from RM54.57 million in FY2014 to RM37.26 million in FY2018.

The newspaper’s circulation has declined so badly that it no longer submits its sales numbers to the Audit Bureau of Circulation. Some attribute its underperformance to an unsuccessful revamp to turn it into a financial paper serving a niche market.

Reviving Nanyang Siang Pau

Nanyang Siang Pau was a once a favourite among the business community. Set up in 1923 in Singapore by prominent Chinese community leader and philanthropist Tan Kah Kee, the almost-100-year-old newspaper was perceived to be relatively independent before ownership changes prompted a more pro-establishment stance.

Ultimately controlled by banking tycoon Tan Sri Quek Leng Chan in the 1990s, the newspaper was popular with readers until MCA’s investment arm Huaren Holdings Sdn Bhd acquired it in 2001. This was despite concerns within the Chinese community that having political owners would colour its independent viewpoint.

Five years later, the publication was bought over by timber tycoon Tan Sri Tiong Hiew King, ranked Malaysia’s 21st richest man by Forbes this year, with a fortune of US$860 million (RM3.55 billion).

The 84-year-old self-made timber and media baron from Sarawak controls four major listed companies on Bursa Malaysia — MCIL, Rimbunan Sawit Bhd, Jaya Tiasa Holdings Bhd and Subur Tiasa Holdings Bhd.

In Chang’s opinion, Nanyang Siang Pau needs to be transformed into a pure financial publication. “The problem with Nanyang is that although it is positioned as a business newspaper, it is not willing to let go of its existing readers. To me, Nanyang has always been, and still is, a general newspaper. It needs an overhaul, not just cosmetic changes,” he remarks.

He suggests turning it into a business weekly to compete directly with The Busy Weekly, the first and only Chinese financial and investment weekly in Malaysia.

The Busy Weekly, a sister publication of Oriental Daily News, is controlled by the KTS Group — a well-known business entity in Sarawak owned by the Lau family, and a fierce rival of Tiong’s business empire.

“Let me put it this way — Nanyang cannot compete with the likes of Sin Chew Daily, China Press or even Oriental Daily News. But in terms of resources, Nanyang is backed by MCIL. If it wants to focus on doing a business weekly, it should be able to put up a good fight against The Busy Weekly,” says Chang.

The current affairs commentator agrees, although he feels that Nanyang Siang Pau has successfully transformed. “The Busy Weekly has a good reputation as a Chinese business weekly, but Nanyang Siang Pau’s distribution network is much stronger.

“Its market positioning has improved a lot. It has established its identity as a business news publication. Although its financial performance is not good, we are certainly seeing more advertisements in the newspaper.”

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