The Edge, 18 August 2014 - Rising Presence

The Edge, 18 August 2014

RISING PRESENCE BY CINDY YEAP

This year's 178 The Edge Billion Ringgit Club (BRC) members made up about 19% of the number of listed companies as at March 31 - the membership cut-off date. They collectively command a market capitalisation of RM1.54 trillion or some 91% of the total market cap on Bursa Malaysia. There were 144 BRC members last year. The combined revenue of the BRC2014 members was up 9.3% year on year to RM701.2 billion from RM641.5 billion in 2013. To put that into perspective, the combined revenue was some 69% of Malaysia's 2013 nominal GDP of RM1.01 trillion. The members made a collective pre-tax profit of RM116.8 billion, compared with RM118.4 billion in 2013. and paid about RM31 billion taxes last year - that's some 24% of the RM129 billion taxes collected by the Inland Revenue Board (IRB) in 2013. The IRB reportedly aims to collect RM140 billion taxes in 2014 - a reflection, perhaps, of greater dominance by BRC members next year. Helped by some large initial public offerings, there were 35 BRC members with at least RM10 billion market cap this year, up from 33 last year. Tine 35 companies command over RM1.1 trillion market cap or two-thirds of the RM1.7 trillion combined market cap of all Bur- MEMBERSHIP No of BRC companies 2014 178 (19.06% of 934 listed cos) 2013 144 (15.4% of 937 listed cos) 2012 144 (15% of 937 listed cos) 2011 185 (19% of 955 listed cos) BRC combined market cap RM1.544.761 RM1.320.444 RM1.197.413 RM1.165.216 BRC combined market representation (as at end-March) 90.91% 90.6% 88% 89% total market cap total market cap total market cap total market cap of Bursa-listed of Bursa-listed of Bursa-listed of Bursa-listed companies companies companies companies sa-listed companies as at end-March 2014. Last year's 33 commanded RM970.5 billion in combined market cap, also about two-thirds of the total pool. Of the 26 new BRC members this year, nine came from IPOs and listings. They are Air Asia X Bhd. Berjaya Auto Bhd. Gas Malaysia Bhd, IOI Properties Group Bhd, Karex Bhd, Matrix Concepts Holdings Bhd, UMW Oil & Gas Corp Bhd. Westports Holdings Bhd and MPHB Capital Bhd, which houses the non-gaming assets of Multi-Purpose Holdings Bhd (now known as Magnum Bhd). Twelve "old BRC members" made a come- back this year after a hiatus last year, while the four 2013 members that did not make the cut this year have all been delisted. The four are Tradewinds (M) Bhd (delisted April 4, 2013): Tradewinds Plantation Bhd (delisted May 10. 2013); Tradewinds Corp Bhd (delisted Sept 26, 2013) and Al-Hadharah Boustead REIT which was delisted on Feb 19 this year. Padiberas Na-sional Bhd, which delisted on April 18 this year after the March 31 membership cut-off date, is still counted as a BRC2014 member. Meanwhile, Malayan Banking Bhd remained the country's largest listed company with a market cap of RM85.84 billion as at end-March, up 8.8% y-o-y from RM78.92 billion in the previous corresponding period. Public Bank Bhd kept its No 2 position as the second largest listed company by market cap but Tenaga Nasional Bhd climbed five places to the No 3 spot as at March 31 this year, from eighth place as at end-March 2013. Tenaga also rose from last year's fifth placing to the No 2 spot in terms of highest pre-tax profits this year, having booked RM5.86 billion pre-tax profits in financial year 2013. There is still some distance to Maybank, though, which retained the top spot as the BRC member that made the highest pre-tax profit in FY2013 with RM8.87 billion. If the proposed mega bank merger between CI MB Group Holdings Bhd, RHB Capital Bhd and Malaysia CONTINUES ON PAGE 6 KEY HIGHLIGHTS FROM PAGE 4 Building Society Bhd goes through, there will likely be another placing change. RHB Capital's RM2.47 billion pre-tax profit in FY2013 placed it at No 12, down one spot from last year. In terms of revenue, Sime Darby Bhd retained the top placing with RM47.2 billion in revenue in FY2013. Tenaga retained the No 2 spot with RM37.13 billion while Maybank edged past Pe-tronas Dagangan Bhd to place third. (See Top 20 tables on page S27 for details.) Beyond the qualitative numbers, it is heart -ening to note that top BRC members scored decent points on their corporate responsibility (CR) initiatives ?a factor that's likely to help them achieve sustainable growt h over the longer term and promote greater inclusiveness in Malaysia. Still, even companies that are doing well on CR initiatives have to continuously step up their game as indications are that expectations of the CR judges are getting higher. With the era of ultra-low interest rates or "cheap debt" regime coming to an end, companies will have to reposition themselves for a new normal. It will be interesting to see the changes in the membership and rankings ahead To borrow the words of Deputy Prime Minister Tan Sri Muhyiddin Yassin to BRC members at the gala dinner in Kuala Lumpur on Aug 11: "You can be competitive one day and be in the dumps the next. Just look at the list of winners from the early years of this programme. How many of these companies are still winners? How many have disappeared from the list? Let us also look at the list of 'excellent' companies celebrated by world-renowned management gurus 10 to 15 years ago. How many of these have survived the test of time? How many can still be considered outstanding companies today? "This is a lesson to note for all of us - it is difficult to acquire competitiveness, but it is even more difficult to maintain it. The marketplace is a brutal one. You have to work hard to be competitive, and harder still to stay competitive. This requires continuous and relentless effort." Whatever the future holds, what's certain is companies that heed these words are already winners. 178 members in 2014, up from 144 members in 2013. The 178 command RM1.54 trillion market capitalisation, or 90.9% of combined market capitalisation, of all Bursa Malaysia-listed companies, up from 90.6% (RM1.32 trillion) in BRC2013, 88% (RM1.20 trillion) in BRC2012 and 89% (RM1.17 trillion) in BRC20TL Combined revenue of RM701.2 billion, up 9.3% y-o-y from RM641.5 billion in 2013 (RM588.7 billion in 2012). Combined pre-tax profits of RM116.8 billion compared with RM118.4 billion in 2013 and RM101.4 billion in 2012. Combined net profit of RM85.7 billion. Unchanged from last year's, but up 22% from RM70.2 billion in 2012. Estimated tax contribution of RM31 billion. Sizeable relative to RM129 billion total tax revenue collected by the Inland Revenue Board in 2013 and RM140 billion the IRB aims to collect in 2014. 26 new members. Nine are from sizeable IPOs and listings ?AirAsia X Bhd, Berjaya Auto Bhd, IOI Properties Group Bhd, Karex Bhd, Matrix Concepts Holdings Bhd, MPHB Capital Bhd, UMW Oil & Gas Corp Bhd, Gas Malaysia Bhd and Westports Holdings Bhd. 12 "old BRC members" are back after a hiatus last year. Four BRC2013 members are no longer listed, so they are not members this year..