KUALA LUMPUR: Retail and property group Wing Tai Malaysia Bhd is considering upping the number of Japan’s Uniqlo brand clothing stores due to its popularity in the suburbs of major cities in Malaysia, while it seeks to consolidate stores like Topman and Topshop and remove non-performing ones.

Chief financial officer Lee Kong Beng said Wing Tai is now one of the top four biggest players in the domestic lifestyle retail market, with 85 outlets distributing 12 international brands including Topshop, Topman, Dorothy Perkins, Miss Selfridge, Warehouse, Karen Millen, Pumpkin Patch, Wallis, Ben Sherman and Furla.

He also said the group, which saw its net profit for its third financial quarter ended March 31, 2015 (3QFY15) fall 42% to RM8.5 million from RM14.6 million a year ago on a slowdown in the property market and weak consumer spending, is positive on the outlook for the retail sector in the second half of 2015.

He believes the weakening ringgit will boost the retail sector by attracting tourists to shop here. The forecast came even as Malaysian retailers cut their sales growth forecast for Malaysia for the third time last week.

"We expect both our core segments, retail clothing and property development, to contribute equally to revenue this year,” Lee told reporters after the group’s extraordinary general meeting yesterday.

“While we expect the retail section to pick up with tourist arrivals due to the weakening ringgit, we also foresee a boost in contribution from the Jalan Ampang  Le Nouvel Condominium project," he added.

The condominium is expected to be launched in the final quarter of this year, said Lee, which will boost the group’s earnings for FY16 ending June 30. 

Lee said the location and pricing of the 195-unit condominium with a 460,000-sq ft saleable area, will interest investors and buyers.

He also shared that Wing Tai's ongoing landed property projects in Penang, namely Jesselton Hills on the island and mid-ranged residences in Mahkota Impian and Bukit Minyak Utama on the mainland, may see new phase launches soon.

At the EGM earlier, shareholders gave the greenlight for the group’s proposed renounceable rights issue of 164.2 million Wing Tai shares on the basis of one rights shares for every two existing shares held by entitled shareholders on an entitlement date to be fixed, to acquire land in Penang and the Klang Valley, refinance bank loans and fund existing property projects.

"We have more than 300 acres (121.4ha) of land now in [Penang and Klang Valley] but we want to increase our land bank. There is no decision on the size we are looking to purchase yet," said Lee.

In a filing with Bursa Malaysia later, Wing Tai announced that the price of its renounceable rights issue has been fixed at RM1.15, which is expected to raise gross proceeds of up to about RM188.8 million.

The issue price represents a discount of about 16.67% to the theoretical ex-rights price of the shares of RM1.38 based on the five-day volume weighted market price of the shares of RM1.50 up to and including July 7 being the last trading day before the price-fixing date of the rights shares yesterday.

Wing Tai’s counter closed down 5.19% at RM1.46 yesterday, for a market capitalisation of RM465.07 million.

This article first appeared in The Edge Financial Daily, on July 9, 2015.