Great Malaysian CEOs Part 2

Well, I got a lot of feedback on the CEO issue following my mentioning of Nazir Razak. There have been naysayers who reminded me that the family name and connections played a significant part. I have to say that there are plenty of people who got to the top with just connections and by having the right family name - but the crux is what do you with it.

I have extended the list, its not just GLCs CEOs, but after surveying the CEOs of listed companies in the country, these 4 would be part of the top 5. Hassan Merican would have easily made the list as well but let's just look at the current crop.

Datuk Shamsul Azhar Abbas

was formerly the President / Chief Executive Officer of MISC Berhad and just recently appointed to the top post of Petronas. I can tell you that a lot of observers breathed a sigh of deep relief when his appointment was confirmed as the stewardship of Petronas assets was at stake.

Shamsul holds a degree in Political Science from Science University of Malaysia, a Masters of Science Degree (MSc.) in Energy Management from University of Pennsylvania, USA and a Technical Diploma in Petroleum Economics from Institute Francaise du Petrole (IFP), France. He joined PETRONAS in 1975 and has held various senior management positions in PETRONAS including Vice President, Petrochemical Business, Vice President, Oil Business, Vice President, Exploration and Production Business and Vice President, Logistics & Maritime Business. On 1 July 2004, he was appointed as the Managing Director/Chief Executive Officer of MISC.

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Jamaludin Bin Ibrahim

Jamaludin Ibrahim joined Axiata Group Berhad (formerly known as TM International Berhad) on March 2008 as the President and Group Chief Executive Officer. He is also a board member of Axiata Group. Prior to that, Jamaludin was with Maxis Communications Berhad, which he joined in 1997 and was appointed Chief Operating Officer in the same year, and Chief Executive Officer in 1998. In 2006, he was redesignated the Group Chief Executive Officer to reflect Maxis’ international footprint. He retired from Maxis in July 2007 but remained as a Board member till February 2008.

During Jamaludin’s decade of leadership with Maxis, the company’s revenue grew more than twenty-fold to about USD2.3 billion, net profit grew to about USD600 million and market capitalisation swelled to more than USD11 billion in 2007 (before the privatisation).

Before joining Maxis, he spent 16 years in the IT Industry. He was Managing Director and CEO of Digital Equipment Malaysia (a Malaysian branch of Digital Equipment, then the second largest IT Company worldwide) from 1993 to 1997. Jamaludin also spent 12 years in IBM (1981-93), the first five years as Systems Engineer and then in various positions in Sales, Marketing Support and Management. Prior to IBM, he was a lecturer in Quantitative Methods at California State University, United States in 1980. Jamaludin graduated from California State University in 1978 with a B.Sc. in Business Administration and minor in Mathematics. He obtained his MBA from Portland State University, Oregon in 1980.

Jamaludin is the Chairman of Celcom Axiata Berhad (formerly known as Celcom (Malaysia) Berhad), the second largest mobile company in Malaysia, and sits on the board of PT XL Axiata Tbk (XL) Indonesia, MobileOne Ltd (M1) Singapore, as well as one local university. In 2008, Jamaludin was appointed board member of the GSMA (the global World GSM Association). He was also appointed board member of Multimedia Development Corporation Malaysia (MDeC) in 2009.

Jamaludin earned the accolade of Malaysia’s ‘CEO of the Year’ 2000 by American Express & Business Times and was inducted into the Hall of Fame for ‘Services to the Mobile Telecommunications Industry’ by Asian Mobile News in 2004. He was also named Asian Mobile Operator CEO of the Year by Asian Mobile News Awards 2007.

Amir Hamzah Bin Azizan was appointed President/Chief Executive Officer (CEO) and Director of MISC Berhad on 1 January 2009. He graduated with a Bachelor of Science Degree in Management (majoring in Finance and Economics) from Syracuse University, New York. He had also attended the Stanford Executive Programme at Stanford University, USA and the Corporate Finance Evening Programme at the London Business School, United Kingdom.

Amir Hamzah joined MISC in 2000 and was the Group's General Manager, Corporate Planning Services. Subsequently in 2004 he was the Regional Business Director (Europe, Americas, Africa and FSU) of MISC based in London, UK before being appointed President / CEO, AET Tanker Holdings Sdn Bhd on 1 April 2005.

Prior to joining MISC, he served the Shell Group of Companies for ten years in various capacities including Head of Financial Services and Manager, Planning & Support at Sarawak Shell Berhad, Marketing Credit Accountant at Shell Singapore Ptd Ltd, Internal Auditor at Shell Eastern Petroleum Pte Ltd and Senior Treasury Advisor at Shell International Ltd, London. Amir Hamzah is Chairman of the Boards of major subsidiaries of MISC Berhad, among which includes Malaysia Marine and Heavy Engineering Sdn Bhd, MISC Integrated Logistics Sdn Bhd, Malaysian Maritime Academy Sdn Bhd and MISC Agencies Sdn Bhd.

Amir Hamzah is also Deputy Chairman, AET Tanker Holdings Sdn Bhd. He is also Director of Bintulu Port Holdings Berhad and NCB Holdings Berhad. Amir Hamzah is Board member of UK P&I Club, PETRONAS Maritime Services Sdn Bhd, as well as Executive Committee member of INTERTANKO. He is also council member of the American Bureau of Shipping, and General Committee Member of Bureau Veritas. He is also a member of Management Committee of PETRONAS.mir Hamzah bin Azizan was appointed as the President / Chief Executive Officer of MISC Berhad on 1 January 2009.





Raised in a fishing village, Chia Song Kun graduated from University Malaya with a B Sc (Hon) degree majoring in Mathematics and worked as a lecturer with Mara Institute of Technology before venturing into private education business and co-founded Inti College (now Inti Universal Holdings Berhad). Having been there and done that, Chia decided to return to his roots - the fishery business, and together with his family members, started QL Group.

Chia nurtured and transformed the business into a diversified agro-based Group with interests in processing of marine products, livestock farming and palm-based activities. Adopting a "win-win" approach, QL Group has now become the largest distributor of animal feed and surimi-based products manufacturer in Malaysia, the largest producer of surimi in Asia, as well as a leading poultry egg producer in Malaysia. Its products could also be found in Japan, Korea, Singapore, Brunei, Australia, China, Sri Lanka and Vietnam. Under his visionary leadership, QL was listed on Bursa Malaysia in 2000 and since then, the Group recorded a healthy turnover and net profit 5-year CAGR of 18% pa and 22% pa respectively. Today, QL Group has sales of more than RM1.4 billion, employing more than 3,000 employees.

Under the leadership of Mr Chia Song Kun, QL has developed a business model that has the following sustainability:
• Stable, broad-based and ample opportunity for growth.
• All 3 core activities are based on Malaysian agriculture resources.
• Food-based business is resilient and has full of value adding and export potential.
• Well aligned with government’s initiatives to grow the fisheries & agriculture industry.
• Able to enjoy tax incentives that are available under the agricultural & fisheries sectors.

Looking Back On Returns

For the first quarter of 2009 I don't think I recommended to look at any one stock as I was not convinced of a rally or a substantive run. The good thing about blogging is that your views are all there to be examined, scrutinsed and criticised ... but it also allows you to reflect and note how your views evolve. Like a diary, the most notable postings started around April 24 this year (can go and check). Its fun to look at how things have turned out, bearing in mind that my assertion that stocks I like should have at least a 30% upside within 6 months, so far so good. If I can get a batting average of 65%, I am happy. There are not many runs in a year for a market like Malaysia, once its there, you have to seize the day and then exit when things are looking dowdy. Usually you can count on 2 runs a year lasting anywhere from 4 -15 weeks each time. Bull markets do not make us smarter, it makes picking winners easier.

FBM 100 Gainers and Losers In August 2009
Top 20 Gainers TR
IJM LAND BHD 23.13%
MULTI-PURPOSE 20.93%
SARAWAK OIL PALMS 18.57%
PROTON HOLDINGS BHD 12.13%
SUNWAY CITY BHD 11.51%
TITAN CHEMICALS CORP BHD 11.32%
MAH SING GROUP BHD 9.78%
BOUSTEAD HEAVY INDUSTRIES CO 9.66%
LINGKARAN TRANS KOTA HLDGS 7.57%
AXIATA GROUP BERHAD 7.14%
SELANGOR PROPERTIES BERHAD 7.14%
AEON CO (M) BHD 6.67% UBG BHD -4.94%
KUALA LUMPUR KEPONG BHD 6.40%
TAN CHONG MOTOR HOLDINGS BHD 5.95%
EON CAPITAL BHD 5.60%
AFFIN HOLDINGS BERHAD 5.56%
GUINNESS ANCHOR BHD 5.48%
AMMB HOLDINGS BHD 4.78%
PETRONAS DAGANGAN BHD 4.78%
PPB GROUP BERHAD 4.63%

Source: Bloomberg Note: TRs (total returns), CG (capital gain) & DY (div yield)

Looking Back

April 24 - Confirmation of A Bull Run For Bursa
April 24 - Stocks & Sectors I Like As CI Breaches 1,000 (Property: SP Setia, UEM Land, even Talam, Sunway City, even MK Land. Financials: AMMB, EON Cap). ... safe to say that these property and financial picks outperformed the market substantially ... so far
April 27 - Talam Coming Out Of PN17 0.08 ... had a good run for a while even at 0.14 or 0.15 at some point I believe, still the run should come when its officially out of PN17
April 28 - MK Land Is Pretty Oversold 0.28 ... now at 0.40 but went as high as 0.47, we got our 30% or more
May 1 - Sell In May & Go Away " History repeats itself for a reason, because they do, people never learn and they keep repeating their actions and decisions time in time out. This is the same posting I did 4 years back in May 2006, and repeated this in May 2008, so for all intents and purposes, I should also repost this for May 2009. Personally, I don't think this May-August will be a down period."
May 5 - Stock Picks For A Nice Trade ... these were ok performers, not spectacular, its for a quick trade, if it works good, if not, get out...
SAAG long up to 0.29
Sapuracrest long up to 1.24
IOI Corp long up to 4.50
Kulim-WB long up to 3.32
Kulim long up to 6.00
May 7 - Go Long On The Brokers .. these were good runs, TA went to 1.27 (now 1.20), Affin went to 2.04 (now 1.88), ECM went to 0.78 (now 0.63), HDBS went to 1.75 (now 1.58), Kenanga went to 0.75 (now 0.65), OSK went to 1.58 (now 1.39)
TA long up to 1.03
TA-WB long up to 0.06
Affin long up to 1.77
Affin-WC up to 0.14
ECM long up to 0.66
HDBS long up to 1.45
Kenanga up to 0.68
OSK long up to 1.38
May 29 - Why I Like Pelikan 0.98 ... possibly the best call so far, now still at 1.52, we got our 30% here
June 4 - A Timely Look At B-Land & B-Toto 3.26 / 4.74 .. both did well, especially B-Land
June 11 - Tanjong, This One Can Buy & Hold 13.00 ... now at 15.82, up 21% so far, a bit more to go to get our 30%
June 11 - Whoops! There It Is (GenM) 2.90 ... now at 2.79, not good, I would cut now ..
June 23 - I Like Green Packet At Current Levels 0.70 ... very good entry levels at 0.70, now share price still at 0.705 but I get 1 right and 1 warrant basically FREE for every 2 shares, great return, easily way past 30%
July 13 - Market Commentary - "I don't like many stocks now as I think markets do look tired, but if you point a gun to my head to force me to buy one stock to hold till rest of they year, I would probably say E&O" 1.04 ...if anybody read this closely, they would have made a bundle, went ballistic today to a high of 1.52
July 17 - Why I Would Buy Astro Now 3.62 .. 3.43 now, news did not filter out as I had hoped, wishy washy developments, sell
July 24 - Why I Am Keen On MPHB Now 1.58 ... 2.11 now, we got 33%, enough
August 4 - Why I Like DRB Hicom 1.13 ... went towards 1.30 but fizzled out, still very keen on this, can hold on
August 12 - Why I Like IJM Land 1.81 ... went to 2.05, now at 1.98, will wait for my 30%
August 21 - Why I Like Bumi-Commerce Bank 10.30 ...recent call...
August 27 - Why I Like QL Resources 3.34 ...recent call ...

The above were views on stocks and sectors that I like, not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

p/s photo: Fiona Xie

Why I Like QL Resources

This is a company not many has heard of. But hey, it just went past RM1.1bn in market cap. Maybe cause its based in Klang??? It has one of the most sought after ROE: 22.4% (2008); 21.4% (2009) and is projected stay between 18%-19% for the next 2 years. Manageable gearing at 0.7x which is slated to come down to 0.6x next year. Its not in the FBM 30 or the FBM 70, but I would be very surprised if it does not make its way into FBM 70 soon.

QL is principally engaged in investment holding and provision of management services, whilst the principal activities of the subsidiaries are investment holding, layer farming, processing, commercial production and distribution of animal feed raw materials and food grain, deep sea fishing and property holding. QL is involved in the activities, such as manufacturing, integrated livestock, oil palm related and distribution. The Group history can be traced back about 20 years ago.

It started as a small scale business integrated livestock activities and towards the tail end if 1993, the company began to corporatize and streamline various family business units.
From 1994 onwards, it focused on building an agro and broad-based business model consist of integrated livestock farming, marine product manufacturing and oil palm milling activities, targeting for listing. The Group was listed on 30th March 2000. During the years 2000 to 2007; it grew all three core activities organically as well as through acquisitions. Major emphasis was placed on marine-based activities as it had competitive edge over other players. During this time, it further refined it's strategy by setting up the platform for long term growth by investing in CPO milling and oil palm plantation development in Indonesia.
The company's main business focus is the manufacture and distribution of fishmeal products. QL is also the largest fishmeal manufacturers in Malaysia and supplied approximately 25% to the market share. Beside this, the company is also the leading producer of surimi, which is fish meat processed into paste form and surime-based products. Meanwhile, its integrated livestock activities consist of distribution of feed meal raw materials and animal health and feed supplements.

In addition, QL is also involved in layer farming and producing of poultry eggs. QL's operations are base in Endau, Johor and Hutan Melintang, Perak. The raw materials, mainly fish are sourced locally especially from Hilir Perak and Kuantan. QL's annual production of surimi and surimi-based products are around 7,400m/t. Meanwhile, its total egg production is about 1.5 million eggs/day. QL has two CPO mills servicing small estates in the vicinity. The mills are located near Tawau and Kunak, Sabah. QL has 20,000 hectares of oil palm development in Eastern Kalimantan, Indonesia and some mature acreage in Sabah.

The main shareholders of the Group are CBG Holdings Sdn Bhd (47.36%) and Farsathy Holding Sdn Bhd (13.48%) and Lembaga Tabung Haji (4.86%). Paid up 329.7m shares with a market cap of RM1.1bn. Pretty tightly held with just a free float of 25%. 1-for-5 bonus issue of up to 66m new shares declared. The bonus issue will raise share capital from 330m shares of RM0.50 par value to 396m.

Share price catalysts:
a) resilient demand for QL’s food and commodity-based products
b) regional expansion plans into Surabaya, Indonesia for its surimi plant and Tay Ninh, Vietnam for its integrated livestock farming project
c) a local boy made good, professional management with a dedicated focus on the important financial ratios, very solid and sustainable ROA and ROE coupled with shrewd debt management and an eye not to over-extend - expect PNB and/or EPF to start accumulating a substantial stake soon

QL is not an exceptional story, just a properly managed company with solid understanding of their products. It basically religiously maintains its net profit margin at 6%-7%; has an enviable debtors/creditor turn of under 30 days (I treat you well, you treat me well); and is projected to have a net profit growth rate of 11% this year, 13.5% in 2010 and 11% in 2011. I would buy and hold for the bonus and then hold on some more. This company is expanding well and I expect their attention to detail to propel QL onto the next level, RM1.5bn here we come.


p/s photos: Haruka Ayase