SECTION 2: OUR STRATEGIC CONTEXT 28 Brand Recognition Early this year, we were honoured to receive the Bronze award in the Entertainment category at the prestigious Putra Aria Brand Awards 2024. The awards are determined through consumer research, making this win a significant endorsement by the public of MST Golf’s brand recognition and service excellence in the industry. Macroeconomic Outlook and Regional Focus In 2024, our operations in Malaysia, Singapore and Indonesia navigated an economic environment characterised by a mix of opportunities and challenges. The global golf industry outlook remains cautious amid geopolitical tensions and softer retail sentiment. However, the golf industry’s largest trade show "2025 PGA Golf Merchandise Show" held from 21st to 24th January 2025 in Orlando, recorded its highest attendance since 2009, with an increase in new exhibitors and attendees. This reflects the sustained global interest in golf. Looking ahead, while Bank Negara Malaysia forecasts Malaysia's GDP growth in 2025 to be in the range of 4.5% to 5.5% , this projection is anticipated to be impacted by the recent imposition of tariff hikes by the US, a development that presents challenges for our export-oriented economy. The weakening of Malaysian Ringgit, coupled with elevated domestic inflation, exerts further pressure on our business, especially on import costs and consumer demand for golf equipment and accessories. Singapore’s strong currency has affected discretionary spending, notably on luxury and high-end products such as golf equipment and branded apparel. The Ministry of Trade and Industry of Singapore (“MTI”) forecasts a slowdown in GDP growth in 2025, compared to 4.4% growth recorded in 2024. Domestic retail sentiment remains challenging due to weaker domestic spending and shrinking market demand, further affected by the closure of several golf facilities repurposed by the government for other uses. Nevertheless, Singapore has emerged as Southeast Asia’s premier destination for international golf tournaments, which is expected to sustain golfing interest. In Indonesia, Bank Indonesia projects GDP growth of 4.8% to 5.6% in 2025. However, weakening fiscal conditions, political developments, and global economic uncertainty are fuelling negative sentiment. Despite this, the Group recognises the growth potential in the golf industry and remains focused on expanding our retail business, particularly in the Indonesian market. The Group's strategic plan will involve more aggressive approach to marketing and promotions aimed at capturing market share, increasing brand awareness, acquiring new customers and driving sales volumes in this key market. As part of our regional expansion plan, we are targeting the commencement of our retail operations in Thailand in 2025. Our entry into Thailand and Vietnam markets has been delayed as we continue the process of identifying the right local partner to support long-term strategic growth. Beyond the above, the Group is also closely monitoring the implications of the US tariff hikes, which took effect in April 2025. These trade tensions are expected to dampen global consumer sentiment. A further potential impact on the retail industry, including golf, is the risk in stock availability disruptions due to decreased demand in the US, which could result in global margin pressure. Lastly, I would like to express my heartfelt appreciation to our dedicated and resilient employees, as well as our valued stakeholders, for their continued trust and confidence. I firmly believe that by working together, we will continue to deliver sustainable growth and long-term value for our shareholders. CEO’S MESSAGE
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