Although it is not often publicized, Malaysia is home to many well-known regional and international brands. Many of these famous brands are owned by companies listed on Bursa Malaysia.
Investors looking for great investment do not always have to sift through hundreds of annual reports. Very often, some of the best investments are right under our nose. All we have to do is to keep our eyes open, especially when we are shopping.
Here are seven well-known brands you may not realize are actually Malaysian.
1. Bonia
If you walk through most department stores, you will find a section selling Bonia bags. The luxury fashion brand that sells bags, shoes, wallets, watches, and fashion accessories is owned by Bonia Corporation Berhad (Bursa: 9288).
In Malaysia, the retailer manages brands like Bonia, Sembonia, CarloRino, and Braun Buffel. Bonia Corporation has a long history. It was founded in 1974 and started out as a designing and manufacturing house for wholesalers in Singapore. Today, the company has operations in 15 countries located in Southeast Asia, East Asia and the Middle East.
Bonia Corporation has a market capitalization worth RM500 million. In its financial year 2016, Bonia Corporation generated a revenue of RM665.4 million and a profit of RM24.9 million. Currently, the company is trading around 17.5 times earnings and gives investors a 2% dividend yield.
2. Premier Tissue
One of the most well-known personal care brands in Malaysia, Premier is owned by NTPM Holdings Berhad (Bursa: 5066). The company has a wide range of products including tissues and other personal care paper products. Its other brands in its portfolio include Royal Gold, Intimate, and Diapex.
NTPM Holdings started out in 1975 as a small jumbo rolls paper producer. Over the last 40 years, it has fought off competition, including major MNCs, to transform itself into a successful consumer company in the region.
NTPM Holdings has a market capitalization of about RM890 million today. In its financial year 2016, the company generated a revenue of RM601.7 million and a net profit of RM57.7 million. (Who would have thought selling tissue paper is more profitable than luxury handbags?) NTPM Holdings is currently trading at 18 times its earnings and offers a 3% yield.
3. Spritzer
Walk inside a supermarket or a 7-eleven and you will definitely spot bottled water for sale. You might see brands like F&N’s Ice Mountain, Coca Cola’s Dasani, and Spritzer.
Spritzer is a Malaysia home brand and one of the largest bottled water providers in the country. Bottled water is also a growing sector with the Transparency Market Research forecasting a 6.6% annual growth from 2016 to 2024. Spritzer itself is confident that it can grow at double-digit rate this year, as the company expanded capacity. Apart from Malaysia, Spritzer also export its products to Singapore, Brunei, China, Hong Kong, Taiwan, and Papua New Guinea.
Spritzer Berhad (Bursa: 7103) is a RM450 million company. In 2016, it generated a revenue of RM288.2 million and a profit of RM28.5 million. It is currently trading at 25 times earnings and has a dividend yield of 1.4%.
4. Padini
The high street brand that seems to be in every major shopping centre in Malaysia is owned by Padini Holdings Berhad (Bursa: 7052). Beside its flagship brand, Padini Holdings also manages brands such as Seed, PDI, Vincci, and Miki Kids. The company sells a wide range of apparel, shoes and fashion accessories.
Beside retailing its products in Malaysia, it has a huge export and overseas markets in places such as Thailand and the Middle East. Padini Holdings is today a RM2.2 billion company, making it one of the largest fashion companies in Malaysia.
The company generated sales of RM1.3 billion in 2016 and a net profit of RM137.4 million. At the moment, the company is trading around 15 times earnings and offers a 3% yield to investors.
5. Parkway East and Gleneagles Hospital
The high-end healthcare provider in Singapore serves not just local patients but also medical tourists who fly in to seek high-quality healthcare in Singapore. Many people may not know that these two hospitals are both indirectly owned by the second largest healthcare group in the world: Malaysia-based IHH Healthcare Berhad (Bursa: 5225). Both hospitals are owned Singapore-listed Parkway Life REIT (SGX: C2PU) of which IHH Healthcare is the sponsor.
Read more: 12 things I learned from Parkway Life REIT’s 2017 AGM
IHH Healthcare is one of the constituent stocks of the Kuala Lumpur Composite Index. It is also dual-listed in Singapore (SGX: Q0F). Today, IHH Healthcare has hospitals and healthcare facilities in countries like Singapore, Malaysia, Turkey, and China.
It has a market capitalization of RM49.4 billion. In 2016, the company produced a revenue of RM10.0 billion and a net profit of RM866.0 million. The company trades at an eye-popping 56 times earnings and offers only a dividend yield of 0.5%.
6. Golden Screen Cinemas
Golden Screen Cinemas is the largest cinema chain in Malaysia. Together with its business in Vietnam, the company manages 361 digital screens in 41 locations. However, what most people do not realize is that Golden Screen Cinemas is a subsidiary of PPB Group Berhad (Bursa: 4065), a blue-chip constituent of the Kuala Lumpur Composite Index.
PPB Group is more well-known for being the largest shareholder of Singapore-listed Wilmar International Limited (SGX: F34). It is also the Malaysian holding company for billionaire Robert Kuok. However, compared to its other businesses within PPB Group, Golden Screen Cinemas is just a small contributor to its profit.
Today, PPB Group is a RM20.0 billion company. In 2016, it generated a revenue of RM4.2 billion and a net profit of RM1.04 billion. Interestingly, much of its profit comes from its associate, Wilmar International Limited. PPB Group now trades around 17.5 times earnings and offers a 1.5% dividend yield.
7. Shangri-La Hotels
Shangri-La Hotels is the brainchild of billionaire Robert Kuok. Shangri-La is a world-famous brand and is associated with high-end luxury hospitality. Although most Shangri-La Hotels globally are managed by Hong Kong-listed Shangri-La Asia Limited (HKEx: 0069), all the Shangri-La Hotels in Malaysia are actually managed by its local subsidiary Shangri-La Hotels Malaysia Berhad (Bursa: 5517).
Shangri-La Hotels Malaysia manages nine hotels and resorts in Malaysia under the Shangri-La, Hotel Jen, Traders Hotel, and Rasa Sayang brands. It also owns a minority stake in the Shangri-La and Traders Hotels in Yangon, Myanmar.
Shangri-La Hotels Malaysia is a RM2.2 billion company. In 2016, it produced a revenue of RM508.6 million and a net profit of RM79.2 million. This means the company is trading at about 28 times earnings and offers a 2.75% yield to investors.
The fifth perspective
Companies like Apple and Nike have shown us the power of a brand. It allows you to charge a premium price for products and services that people will still choose to pay for. The examples above are brands with a long history and strong reputation that are born in Malaysia but have grown internationally. (Malaysia Boleh!)
For investors who are interested in companies with a good brand equity, these ideas might be interesting to look at.
