KUALA LUMPUR: Agriculture player QL Resources Bhd came out tops at The Edge Billion Ringgit Club (BRC) Corporate Awards this year, taking home the coveted Company of the Year award.

The company, which started as a small family business distributing animal feed in a fishing village in the 1980s, was recognised for its strong profitability and creation of shareholder value. QL Resources, which beat many larger companies with deeper pockets, not only exhibited entrepreneurial success, but won judges over with other qualitative elements that proved it a socially responsible corporate player. Certainly, there’s the strength reflected in the strong gains in its share price and profitability the past three years.

Its founder and managing director Chia Song Kun, 60, was honoured and excited over the win. “I am truly proud of QL Resources’ achievement. We strongly believe that our core values have been the driving force behind our new found recognition. These values involve innovative thinking, cooperative teamwork as well as integrity in our actions and decisions,” he told The Edge Financial Daily.

Chia also praised the company management for its strong business acumen, execution capability, good ethics and risk management discipline. “But most of all, there is an unshakable belief in creating value for all stakeholders, or put simply, value for all,” he said.

QL Resources is a classic rags-to-riches story. Chia, who started the family business in 1984 after serving 11 years as a lecturer with Universiti Teknologi Mara in Shah Alam, had in just 27 years transformed what was a small-time fishmeal distributor into a billion ringgit operation. Today, QL calls itself an integrated livestock farmer, being one of Asia’s largest surimi or fish paste producer.

The group has also moved into the lucrative oil palm business — moving up from just a miller with 3,000 acres (1,200ha) of oil palm estate in Sabah — to owning and managing a 40,000 acre oil palm plantation in East Kalimantan, Indonesia.

Then there’s its third core business of livestock farming where the  three million eggs its produces a day makes it one of the country’s leading poultry egg players.

Its growth is nothing short of phenomenal. Listed with a market capitalisation of only RM100 million at its IPO in 2000, QL Resources’ market capitalisation today stands at RM2.6 billion. In its first decade as a listed company (2000 to 2010), the company achieved a 10-year average return on equity (ROE) as well as compound annual net profit growth of 23%. Incidentally, it also saw a 23% annual gain in its share price. Since then, its shares have surged another 80%. In the past three financial years, its net profit rose 69% from RM63.25 million to RM106.91 million. That helped it deliver a 47.6% annual return to shareholders, from a combination of share price gains and dividends.

The Edge BRC represents 89% market cap on Bursa

QL Resources is one of many winners at The Edge Billion Ringgit Club (BRC) Corporate Awards gala dinner, held at Shangri-La Hotel in Kuala Lumpur yesterday.

The event was graced by more than 240 guests and industry captains including Minister in the Prime Minister’s Department Datuk Seri Idris Jala who was the guest of honour. Idris is also the CEO of Performance Management and Delivery Unit (Pemandu).

Idris Jala said The Edge BRC is a distinguished crowd and represented 19% of the total number of companies listed on Bursa Malaysia. It also represented over 89% of total market capitalisation on the local bourse.

“It is my hope that… more companies would join this prestigious club,” he said at the event.

He added that private investment has grew 6.6% in the first quarter of the year, while foreign direct investment (FDI) more than doubled in the same period.

“This is reflected by the performance of Bursa Malaysia. Our national bourse hit six record highs in the first seven months of this year,” said Idris.

He said the private sector plays an important part  in fuelling economic growth, and is expected to contribute 92% of US$ 444 billion (RM1.34 trillion) in total investment as part of the Economic Transformation Programme (ETP).

He added that 73% of private investment needs to come from domestic sources with some RM300 billion needed by 2020.

“This is absolutely critical to ensure that we are not totally at the mercy of global trends and shocks. We have the resources for this. In addition, the capital market has grown from RM717.5 billion in 2000 to RM2.033 trillion in 2010, a compounded annual growth rate of 11%. This again indicates that we have the financial muscle to fuel this growth,” he said.

The Edge BRC honours the best companies

Launched last year, The Edge BRC recognises and groups together companies with at least RM1 billion in terms of market capitalisation on March 31 of each year, or turnover for the immediate preceding year.

To qualify for membership in 2011, a company must have at least RM1 billion in market capitalisation as at March 31, or RM1 billion in revenue for the financial year 2010.

This year, The Edge BRC saw 185 companies joining the prestigious fold, an increase of 22 companies from 163 last year.

“Membership in The Edge BRC is automatic for companies that meet the criteria. On the other hand, The Edge BRC Corporate Awards are strictly based on performance,” said The Edge editor-in-chief Dorothy Teoh.

Award winners are selected from among the members of The Edge BRC through universal and widely accepted measurements that are transparent and based on merit.

Apart from quantitative measures, a panel of judges also reviews the companies for its corporate social responsibility efforts.

A total of 25 awards were awarded last night. They comprise the Company of the Year award, and 24 sectoral awards, including three for big-cap companies with market capitalisation of over RM10 billion.

The 24 sectoral awards, for each of the seven Bursa Malaysia designated sectors plus one for big-cap companies, are Best Performing Stock Award; Most Profitable Company Award and Highest Profit Growth Company Award. These award are evaluated on the company’s performance over the last three financial years.   

The Best Performing Stock Award captures returns to shareholders, comprising share price appreciation and dividends.

The Most Profitable Company Award is based on return on equity, while the Highest Profit Growth Company Award is given to the company with the highest compound annual growth in profit before tax over the past three years.   

“The awards are a transparent way to recognise successful companies in Malaysia based on fully transparent assessments of their financial performances,” said The Edge chairman Datuk Tong Kooi Ong.

Tong added that The Edge has organised the award to encourage businesses to become more competitive, strive for greater success, be more efficient and result oriented.

“Our economic transformation journey up the value chain from low to mid-income and eventually to a high-income nation can only be achieved if there is increased productivity, efficiency and investments that will support higher income and economic growth,” said Tong.

Sectoral and big-cap winners

Other winners at the BRC awards in the respective sectors included Malaysia Building Society Bhd and Public Bank Bhd (finance sector); IOI Corporation Bhd and Kulim (Malaysia) Bhd (plantation sector), Sunway City Bhd, Bandar Raya Developments Bhd and Mah Sing Group Bhd (property and REIT sector); KPJ Healthcare Bhd, DKSH Holdings Malaysia Bhd and Berjaya Sports Toto Bhd (trading/services, IPC and technology sector); Mudajaya Group Bhd (construction sector); Guan Chong Bhd and British American Tobacco Malaysia Bhd (consumer products sector); and Coastal Contracts Bhd and Supermax Corporation Bhd (industrial product sector).

British American Tobacco Malaysia, Genting Bhd, and Petronas Dagangan Bhd were recognised in the companies with over RM10 billion market capitalisation category.

Judges and sponsors

Starting this year, The Edge BRC also recognises the top companies in terms of corporate social responsibility (CSR).

The top 10 CSR companies for 2011 were (in alphabetical order): Boustead Holdings Bhd, Bursa Malaysia Bhd, CIMB Group Holdings Bhd, DiGi.Com Bhd, Guinness Anchor Bhd, Petronas Gas Bhd, Nestle (Malaysia) Bhd, Telekom Malaysia Bhd, Tenaga Nasional Bhd and United Plantations Bhd.

Judges  for the CSR component for the Company of the Year award as well as the top 10 CSR companies were OCBC Bank (Malaysia) Bhd CEO and director Jeffrey Chew, Bursa Malaysia Bhd chief regulatory officer Selvarany Rasiah, World Vision Malaysia chairman and Mah-Kamariah and Philip Koh senior partner Philip Koh and The Edge’s editor-in-chief Dorothy Teoh.

OCBC Bank (M) Bhd returned as the main sponsor of The Edge BRC this year for the second year running.

“Tonight, we have witnessed an excellent showcase of Malaysia’s finest billion ringgit enterprises. We congratulate the winners of The Edge BRC for succeeding both in being Malaysia’s biggest and best publicly-listed companies in financial terms as well as efforts in corporate social responsibility,” said Chew.

BMW Group Malaysia and Audemars Piguet are the supporting sponsors, while Astro Awani (Malaysia) is the official broadcaster.  

Astro hopes that The Edge BRC will encourage more Malaysian companies to strive to adopt global best in class practices and aim for new standards not only in financial performance but also in corp goverance, said its COO Henry Tan.

The results were audited by Deloitte Malaysia.

The full list of The Edge BRC members and award winners will be published in a special, complementary 40-page supplement in the July 18 issue of The Edge.

TheEdge Billion Ringgit Club 2011 Corporate Awards