Kuo: All the companies I bought into have managed to turn around

PETALING JAYA (Nov 25): Mudajaya Group Bhd’s new major shareholder Kuo Jen Hao is confident the construction and engineering firm will be restored to its former glory.

More commonly known as Jerry Kuo, the 42-year-old Taiwanese businessman sat down with The Edge Financial Daily at Mudajaya’s headquarters last week where he shared his ambitions for the group to return to where it was during its heydays.

“I understand that Mudajaya’s investors want to see the company do better, and for its stock price to go up. We are in the same boat, so don’t worry about that.

“All the companies I bought into have managed to turnaround ... When I invested in [Taiwan-based shipping and retail group] First Steamship Co Ltd some three years ago, it was on the edge of bankruptcy. But I turned the company around and its [share] price doubled in two years, and we paid back bank loans of over US$300 million.

“Our goal here is to increase Mudajaya’s revenue and profit. What we will do is to try our best to put in resources like capital and business relationships, to make the company great again. It has huge potential and is undervalued,” Kuo shared.

Kuo, who has under his belt experience in shipping, logistics, department stores, hospitality, financial services, and real estate development, said construction is a missing puzzle piece in his diverse business portfolio.

Chairman of three Taiwanese listed companies — First Steamship, Grand Ocean Retail Group Ltd, Taiwan Environment Scientific Co Ltd — and director of Hong Kong Stock Exchange-listed satellite television producer Sandmartin International Holdings Ltd, Kuo points to the host of possible domestic and regional synergies between Mudajaya and his companies to propel his first Southeast Asian investment forward.

According to him, this includes collaborating for construction projects regionally, especially in view of Malaysia’s limited resources, as well as in waste and renewable energy soon.

“One of our focus areas is to combine Mudajaya with my strengths. For example, Taiwan has cheap capital and good manpower. We can collaborate for projects in the Middle East, the Philippines, China, or any other country.

“The Taiwanese government also encourages us to invest in clean energy, an area where Mudajaya has experience in,” Kuo said. Mudajaya has four power generation plants in its portfolio, with the latest addition being the 49mw solar photovoltaic plant in Sungai Siput, Perak.

Mudajaya group managing director-cum-chief executive officer James Wong Tet Foh said Malaysia is a good platform for Kuo to springboard his renewable energy (RE) venture given the increasing interest towards RE.

This is in line with Mudajaya’s plans to participate in the government’s large-scale solar farms initiatives and further develop solar farms within the Asean region to boost its generating capacity and enhance recurring revenue. The group could begin by supplying solar panels in China where Kuo owns shopping malls, said executive director Lee Eng Leong who was also present at the interview.

“With a stronger balance sheet, it gives us the armour to move forward,” Wong said, adding that regional countries such as Taiwan and Cambodia could be in its future RE plans.

Nonetheless, having just completed the acquisition, Kuo said his nearer-term plan is to understand the company better and work closely with its management, although he has yet to decide whether to join Mudajaya’s board.

“I have a lot of resources to help Mudajaya, and Mudajaya has its own strengths to accomplish projects. I think we can do a lot of things together. I will definitely support the company if it needs capital.

Kuo said he is aware of Mudajaya’s troubled investment in India but remains sanguine about the group’s prospects since the independent power plant asset has been fully impaired. The group is also sitting on a construction order book of RM1.4 billion that is sustainable for the next two years, while its tender book, according to Wong, totals at some RM10 billion spanning both public and private sectors.

Kuo also said he could not comprehend market speculations of him triggering a mandatory general offer for the Bursa Malaysia-listed company. He said he is not one to waste time and wants to “work hard to get to where we want to be, as soon as possible”.

“In the short term, there is no intention to increase my stake. I think I am happy with my position [at 27.52%] right now.

“I don’t do that (speculate). If the company makes a huge amount of profit but the market doesn’t recognise it, of course that presents a good opportunity for me. But we do not emphasise on this. We don’t focus too much on stock prices either. The market will decide by itself,” he added.

This article first appeared in The Edge Financial Daily, on Nov 25, 2019.

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