LSH’s towering feat

BARELY a year after its debut on Bursa Malaysia’s ACE Market, Lim Seong Hai Capital Bhd (LSH) is preparing for a transfer to the Main Market.

This comes after it delivered good earnings growth and secured access to one of Kuala Lumpur’s key skyline tourism assets.

It has successfully bid for the 20-year concession to operate, manage and maintain the Kuala Lumpur Tower (KL Tower), from April 1, 2025.

The group, which first went public on the LEAP Market in July 2021, is also attempting to reposition itself from a traditional contractor into an infrastructure, property and facilities-management player.

“We are not a typical contractor,” LSH’s chairman Tan Sri Lim Keng Cheng tells StarBiz 7.

The company’s transformation is best symbolised by its KL Tower concession, which also coincides with Visit Malaysia 2026’s momentum.

In the first quarter of the financial year 2026 ended Dec 31, 2025 (FY26), LSH’s facilities-management segment generated RM20.4mil in revenue and RM14.2mil in gross profit, translating into a gross profit margin of nearly 70%.

Under the concession structure, the government receives 15% of annual revenue, while the group is targeting annual ticketing sales of roughly RM60mil.

“The KL Tower has been the showcase of our BEST Collaboration Framework, in which it brings together construction, facility management and tourism under one umbrella.

“Since taking over in April 2025, we have been focused on two tracks. First, stabilising day-to-day operations and uplifting visitor experience and safety,” Lim says.

The company also plans to invest about RM70mil over five years to upgrade facilities at KL Tower and develop ancillary commercial attractions surrounding the site.

Its proposals include retail and food and beverage outlets, tourism-oriented attractions, shuttle bus connectivity and upgraded visitor facilities aimed at increasing footfall.

“We want to improve visitor flow and tourists,” Lim says, adding that social media-driven tourism marketing will play a major role in revitalising the attraction.

Among the concepts being planned are a commercial area near Jalan Raja Chulan, tourism retail spaces and upgraded viewing experiences designed to broaden the attraction beyond a conventional observation tower.

The move reflects a wider shift within LSH’s business model.

Once known primarily as a contractor, the group has expanded into property development, infrastructure and now concession-based recurring income assets, supported by what Lim describes as a collaborative operating framework that reduces capital intensity and improves operational efficiency.

That strategy appears to be translating into strong growth in both profits and market capitalisation.

For the financial year ended FY25, the group posted a recent profit of RM103.8mil, rising 39% from RM74.3mil a year earlier.

Lim notes net profit has grown multifold from just RM7.9mil in 2021 before the company embarked on its current expansion strategy.

The company also remains in a net cash position, with roughly RM130mil in cash and zero gearing while maintaining an order book stretching to 2030.

“Our market cap is more than double from the first day we were listed. Our stock performance has been quite encouraging and well received,” Lim says.

Institutional ownership has also increased steadily. Lim says institutional funds now account for roughly 25% of the company’s shareholder base.

The group’s RM1.31bil outstanding order book (with external contracts amounting to RM430mil) provides earnings visibility over the next five years for construction and property development projects.

On the construction front, LSH is increasingly targeting government infrastructure jobs, leveraging partnerships with bumiputra contractors and suppliers under its BEST collaboration framework.

Lim says this framework allows the group to scale more efficiently by pooling machinery, procurement and operational resources across projects, among others.

“If the company is alone, it’s difficult. But because of collaboration, we can potentially secure more jobs,” he quips.

The strategy also helps the group manage rising construction costs amid persistent inflationary pressures and global supply chain uncertainties.

“We can do bulk orders with factories to secure better bargains,” Lim says, adding that machinery can also be shared between projects to minimise downtimes and improve utilisation.

Despite concerns over rising raw material costs due to ongoing geopolitical conflicts, Lim remains confident about preserving margins, particularly for government infrastructure contracts that allow for cost variation mechanisms.

The property development segment is another key earnings pillar.

In this segment, LSH is largely focused on mid-market urban developments priced below RM500,000, particularly transit oriented development projects.

Lim believes this positioning insulates the group from the prolonged oversupply pressures affecting the broader stratified property market.

“Our product in property development is not very high-end.

“We reduce the unit size to ensure the product is under RM500,000 so there is no issue on sales here for us,” Lim says.

The group’s projects appear to support that view.

LSH Segar has achieved a take-up rate of 92%, while earlier projects such as LSH 33 were fully sold.

Lim points out the RM300mil gross development value (GDV) LSH 33 project had generated roughly RM100mil in profits.

The company is also building a broader property pipeline, including the RM1.15bil GDV Lake Side Homes project launched earlier this year, as well as mixed developments at Jalan Pahang and Gombak under the BEST framework.

According to Lim, a key differentiator is the company’s preference for collaboration agreements over outright land acquisitions for property developments.

By jointly developing projects with landowners instead of purchasing land outright, the group reduces upfront capital expenditure and financing costs while preserving balance sheet flexibility.

“If possible, we don’t want to spend on capital expenditures to acquire the land. We prefer to sign collaboration contracts and share the profits (among stakeholders),” Lim says.

That asset-light approach, combined with strong operating cash flow and recurring concession income, now underpins the group’s Main Market ambitions.

Lim says preparations for the migration are already underway and the company is ready to apply “at anytime” within the current financial year.

Moving forward, Lim says the company targets for another 30% year-on-year growth in net profit for FY26.

If this is achieved, it would further reinforce the company’s rapid evolution from a relatively small contractor into an increasingly diversified asset owner and infrastructure operator.