Lim Seong Hai Capital's LEAP Market listing to boost confidence


Continuing a legacy: Lim Seong Hai Capital non-executive chairman Tan Sri Lim Keng Cheng and his siblings (from left) group managing director (MD) Lim Pak Lian, vice executive chairman Datuk Lim Keng Guan, as well as machinery, hardware and tools division MD Lim Keng Hun listed the group in memory of their late father.

KUALA LUMPUR: Honouring their origins and the memory of their late father, Tan Sri Lim Keng Cheng and his three siblings have successfully listed Lim Seong Hai Capital Bhd (LSH Capital) in his name on Bursa Malaysia’s LEAP Market today - marking the first step to prepare the group for an eventual listing transfer to other markets on the bourse.

His siblings are LSH Capital vice executive chairman Datuk Lim Keng Guan, group MD Lim Pak Lian, as well as machinery, hardware and tools division MD Lim Keng Hun.

“This is an important day for the Lim family, as we finally realised our dream to list the business that was founded by our late father back in 1966. We always remember his teachings, which is to always have gratitude towards our origins and walk step-by-step towards success. There’s no shortcut in doing business.

“We can assure our investors that this is only the beginning of many good things to come,” said Keng Cheng, who acts as the group’s non-executive chairman.

The substantial portion of the group's RM69.7mil orders originate from the LSH33 property development project situated in Sentul.The substantial portion of the group's RM69.7mil orders originate from the LSH33 property development project situated in Sentul.

He added that the group does not set impossible targets, but instead takes it a step at a time with good corporate governance and an emphasis on transparency.

Traditionally, family-owned companies tend to seek listing to raise funds or recognition from the general public, but for LSH Capital, Keng Cheng said that the aim was to provide assurance and show appreciation to the loyal customers that have been with the group through the years.

He added, even for something as small as product warranties or after-sales service, the group places its customer first and believes it is the way forward to gain confidence with its present and future clients.“The listing is not to raise new capital, but to boost investor confidence through our LEAP Market introduction and demonstrate our commitment through action.

“Our minimum target is to achieve RM10mil profit after tax (PAT) in yearly revenue and we ultimately want LSH Capital to reach RM1bil within 10 years’ time,” he noted.

Taking the BEST approach: The four directors’ combined 135 years’ experience will help sustain the group’s future growth and overall financial performance, leveraging its BEST formula.Taking the BEST approach: The four directors’ combined 135 years’ experience will help sustain the group’s future growth and overall financial performance, leveraging its BEST formula.

That said, in the pipeline are plans for a fundraising exercise in the near future, once the group has demonstrated a stronger performance in its financial results.

LSH Capital registered RM48.12mil in revenue for the financial year ended Sept 30, 2020; with RM4.14mil PAT. For the first six months ended Mar 31, 2021, it registered a revenue of RM41.61mil with a PAT of RM5.56mil.

He added that while the group’s subsidiaries currently include Lim Seong Hai Lighting and Knight Auto, Astana Setia Sdn Bhd and its moneylending business under Lim Seong Hai Holdings Sdn Bhd may eventually be incorporated into the group. It is also eyeing moving to the ACE Market and the Main Market along its roadmap.

The listing was implemented via way of introduction with the release of an information memorandum, meaning that instead of a fundraising exercise upon admission to the LEAP Market, it only involved the issuance of 35,859,575 new shares to pre-listing investors at the subscription price of RM0.13 per share with RM4.67mil in total proceeds.

Building strong relationships: The group places its customer first and believes it is the way forward to gain confidence with its present and future clients, says Keng Cheng.Building strong relationships: The group places its customer first and believes it is the way forward to gain confidence with its present and future clients, says Keng Cheng.

The exercise involved the listing of its entire issued share capital of RM36,580,323.75, comprising 355,045,293 shares.

The four promoters - Keng Cheng, Keng Guan, Pak Lian, Keng Hun - own 62.34% in LSH Capital, through Lim Seong Hai Resources Sdn Bhd. The latter is wholly-owned by Lim Seong Hai Holdings, in which the four promoters each own 25% equity.

The four promoters also each hold a 6.89% stake in LSH Capital, leading to the Lim family owning a total stake of 89.9%.

Astramina Advisory Sdn Bhd is the approved adviser and continuing adviser for the listing.

Steady growth ahead

Thus far, LSH Capital has secured approximately RM69.7mil in orders for the provision of lighting products, related mechanical and engineering (M&E) products and services, as well as building materials and machinery rental. Of the figure, RM63.2mil is expected to be recognised in the group’s revenue for the period up to year 2024.

The substantial portion of the orders originate from the LSH33 property development project situated in Sentul, which has direct access to the Duta-Ulu Kelang Expressway (DUKE).

Consisting of 900 apartment units and 32 commercial lots, LSH33 will also house LSH Capital’s new retail shops for its subsidiaries, as well as a decorative lighting-themed commercial space that will also be supplied by the group.

Through these subsidiaries, LSH Capital is principally involved in the provision of building materials, lighting products, and related M&E products and services, hardware and tools, as well as rental of machinery.

“We currently operate one head office, eight retail stores and one warehouse in the Klang Valley. We intend to set up 2 additional Lim Seong Hai Lighting retail stores and 3 additional Knight Auto retail stores in Kuala Lumpur by 2024,” said Keng Cheng, adding that setting up the five additional retail stores would cost an estimated RM12.7mil, which will be partially funded by the proceeds generated from pre-listing investors and internally generated funds.

He said, “Furthermore, we have observed considerable growth from our e-commerce sales over the past few years, partially owing to the push for online shopping due to the Covid-19 pandemic.”

The next step, Keng Cheng shared, is to further digitising its operations, in particular the order and delivery processes of building materials, as well as allocating more resources to e-commerce for the retailing of lighting products, hardware and tools.

Vision moving forward

The combined 135 years’ experience and expertise of the four LSH Capital promoters and directors in the fields of construction, property development, accounting and finance and M&E will help sustain the group’s future growth and overall financial performance, to position it as a solution provider that offer clients and customers free-of-charge services in line with its BEST formula.

The BEST formula comprises the Blue Ocean Strategy to secure sales and contracts; Enhancement solutions for finance in cash flow planning; Sustainability, made affordable for business policymaking, as well as Transformation and innovation in engineering solutions for projects and clients.

Believing in building strong relationships, Keng Cheng said, “We don’t look at other people’s successes, but their failures, to learn from them and bring that expertise to our clients.”

He said that in return for the services it provides using the BEST formula, its subsidiaries will in turn be awarded supply contracts and services from clients in a win-win situation.

When it comes to the future, Keng Cheng said that he and his siblings are still committed towards growing the group, noting that each generation taking over LSH Capital should do business as aggressively as if it were in its first generation.

Internally, the guiding principles that set the direction for LSH Capital are broken down into allocating 50% for the group’s growth plans, 30% to its shareholders, 10% to reward its staff through education and training, as well as 10% towards environmental, social and governance considerations.

The intention, he highlighted, is to set the right foundation for growth with the right values. This is reflected in LSH Capital’s tagline, echoing its BEST formula: sustainability, made affordable.

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