Market Share vs. Globalisation

Datuk Henry Chin Poy Wu, aged 65, a Malaysian, was appointed to the Board of Magnum on 21 September 2000. In 1993, Datuk Henry Chin retired from the government service after 39 years of service. He was the Commissioner of Police Kuala Lumpur before his retirement. During his career, he had been trained overseas including Australia, United Kingdom, America and Japan. After his retirement from government service, he began his involvement in business and is now a director of several public listed companies. Datuk Henry Chin currently holds directorships in Malaysian Mosaics Bhd.

, J. T. International Bhd. , Nanyang Press Holding Bhd, Kilang Papan Seribu Daya Bhd. , Eastern & Oriental Bhd. , Glenealy plantation Malaysia and Hap Seng Consolidated Bhd. Mr Wong Ming Shiang, aged 37, a Malaysian, was appointed to the Board of Magnum on 21 September 2000. Mr Wong has a MBA from Southern Cross University, Australia. He also holds postgraduate Diploma in Commercial Law, Monash University, Melbourne, Australia and a Bachelor of Business (Accounting) from Chisholm Institute of Technology, Melbourne, Australia. He is a member of MIA and CPA Australia.

He is now self-employed consultant after several years working experience in public accounting firm. He is also the member of the Audit Committee of Magnum Group. Magnum Group was the first company to be granted a licence to promote, operate and manage 4D numbers forecast betting in Malaysia. It has been over 33 years since and Magnum 4D, as the market leader, continued with its pioneering spirit in various aspects. In the long-run business, new competitors have started to enter into the market to compete with Magnum 4D, creating a greater competition among themselves.

The main competitors are the Berjaya Sport Toto and the Pan Malaysian Pools Sdn. Bhd. However, Magnum 4D is the main leader in the market as it is the longest member that has been existed in this particular market, with the enough knowledge and experience in capturing the market. Moreover, 4D numbers forecast betting game never fails to attract continuous customers to play as it is a habitual game. More importantly, customers always cherish a sceptical attitude that the numbers they bet would expect to appear in any of the 4D numbers forecast betting companies; nevertheless, they bet in all the three companies.

That is the reason why Magnum 4D can generate an extremely high sales if compared to other industries. Magnum 4D is unlikely to be substituted by any items that appear in the market. Monthly lottery ticket is unlikely to be the substitute item, because the demand for it is low, somehow sampling analysis shows the chances of winning is much more slimmer than 4D game. Moreover, people can only bet once a month. Besides, the Casino in Genting Highlands and cruises, may not be the relevant substitute items to Magnum 4D as the cost to play in casino is a great amount of money compared to Magnum 4D.

As a conclusion, Magnum core business has great competitors in the market, which are the Berjaya Sports Toto and the Pan Malaysian Pools Sdn. Bhd. , organising 4D numbers forecast betting game respectively. Since Magnum 4D is an oligopoly market structure, substitute items seem not existing in the market. The gaming industry was not spared from the effect of cautious consumer spending, and this was made worse after the September 11 incident. Overall, number forecast gaming operators experienced some marginal decline in turnover.

This was also partly due to one less gaming draw conducted in the year. Global hotel industry is believed to be affected the most after the U. S. 911 incident, has reflected the status of the hotel industry to become more fluctuating. People were fear to take flight to travel over the countries. The printing industry's profitability was derived from its profitable flexography printing and this had however, been weighed down by its unprofitable offset printing operations.

In order to curb the erosion of profitability and also to focus on its more important flexography printing, which is primarily serve magnum Group's gaming operations, the Company had closed down its offset printing division early of 2002. The rationalism exercise to result in a decrease in sales for future years but more importantly, is expected to result in substantial cost savings and to enable the printing industry to focus on its profitable flexography printing which will eventually contribute to a higher profit in the coming years.

The underlying positive economic numbers for Malaysia are encouraging for 2002 with growth projection in private consumption, a modest recovery in private investment, sustained public sector expenditure and a moderate growth in exports. The outlook of the global economy overall has improved, supported by positive developments in the U. S. Magnum Group has a stable domestic political environment, coupled with easing of fiscal policy which is expected to strengthen domestic private consumption, will improve customer confidence and these augur well for the industry.

Management will continue its change management processes and promotional campaigns initiated in 2001, and implement new strategies to strengthen the core business and to explore new gaming business opportunity overseas. As such, the Board is optimistic of the continued profitability of the Group in the current year. Magnum Group currently has a total land bank of about 5600 acres and based on management review carried out periodically, certain land banks have been identified with good potential and prospects for various proposed mixed development projects in the immediate future.

The increase in the Tourism fund to RM400 million in Malaysia in the year of 2002, tax exemptions, extension for foreign and local tourism activities and tax allowances proposed by Government Malaysia will augur well for the hotel business in future. Moreover, Malaysian Government measures in increasing the disposable income through pay rise, reduction in individual taxes thereby improving consumer spending. These effects will indirectly enhance the growths of Magnum Group's all business segments in future.