Hap Seng Consolidated Berhad is a major Malaysian conglomerate, which was established by the Lau family, its largest shareholders. The Managing Director Edward Lee Ming Foo has been running HAP with great success, taking the company from a #3 rank on Profitable Growth in 2012 to the #1 rank it has maintained since 2014. Learn more at: http://becomeabetterinvestor.net/blog/hap-seng-consolidated/

1. Presented by: Dr. Andrew Stotz, CFA
Hap Seng
Consolidated Bhd

2. 28 August 2016
Background: Hap Seng Consolidated Berhad is a major Malaysian
conglomerate, which was established by the Lau family, its largest
shareholders. Historically, its core business had been palm-oil
plantations, but in recent years, property has become its main
source of profits. Malaysia constitutes 96% of its business, the
rest mainly in Indonesia.
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
Operating profit breakdown, by business segment 2015
Stock information:
Name: Hap Seng Consolidated
Bhd.
Ticker: HAP MK
Price (MYR): 7.75
Mcap: US$4,772m
3MADTO: US$4m
Beta: 0.2x
Sector: Industrials
Industry: Capital Goods
Major shareholders:
74% Cho Kun Lau
1% Dimensional Fund Advisors LP
22% Free float
Hap Seng Consolidated Berhad (HAP MK)
 HAP operates in several businesses such as property, plantations, credit financing,
fertilizers, automotive, and others such as quarries and trading
 Property division is involved in the development of residential and commercial properties
in Sabah and West Malaysia. HAP’s commercial properties achieve high occupancy rates of
over 90% and provide around 1,000,000 square feet of rentable area
 Plantations division is engaged in production and distribution of crude palm oil (CPO)
with total area of palm plantation accounting for 40,000 hectares, which is in Sabah. HAP
produced 160k tons of CPO in 2015
 Credit financing division operates under Hap Seng Credit Sdn Bhd with the network
comprising 10 branches nationwide providing term loans and industrial hire purchase
financing to small and medium companies
 Fertilizers trading business is operated through eight warehousing facilities in Malaysia
and five in Indonesia, offering several types of fertilizers used on plantations. HAP has 35%
of the fertilizer market share in East Malaysia and around 17% in Peninsular Malaysia
-
100
200
300
400
500
-
2
4
6
8
10
Aug-13 May-14 Feb-15 Nov-15 Aug-16
HAP MK (LHS)
Price relative to local index
(MYR) (%)
Property 51% Plantations 17% Automotive 3%Credit financing 17% Fertilizers 4% Others 8%

3. 38 August 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
Background: Hap Seng Consolidated Berhad is a major
Malaysian conglomerate, which was established by the
Lau family, its largest shareholder.
Historically, its core business had been palm-oil
plantations, but in recent years property has become its
main source of profits.
Malaysia constitutes 96% of its business, the rest mainly
in Indonesia.
Hap Seng Consolidated Berhad (HAP MK)

4. 48 August 2016
-
100
200
300
400
500
-
2
4
6
8
10
Aug-13 May-14 Feb-15 Nov-15 Aug-16
HAP MK (LHS)
Price relative to local index
(MYR) (%)
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
Stock information:
Name: Hap Seng Consolidated Bhd.
Ticker: HAP MK
Price (MYR): 7.75
Mcap: US$4,772m
3MADTO: US$4m
Beta: 0.2x
Sector: Industrials
Industry: Capital Goods
Major shareholders:
74% Cho Kun Lau
1% Dimensional Fund Advisors LP
22% Free float
Hap Seng Consolidated Berhad (HAP MK)

5. 58 August 2016
Background: Hap Seng Consolidated Berhad is a major Malaysian
conglomerate, which was established by the Lau family, its largest
shareholders. Historically, its core business had been palm-oil
plantations, but in recent years, property has become its main
source of profits. Malaysia constitutes 96% of its business, the
rest mainly in Indonesia.
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
Operating profit breakdown, by business segment 2015
Stock information:
Name: Hap Seng Consolidated
Bhd.
Ticker: HAP MK
Price (MYR): 7.75
Mcap: US$4,772m
3MADTO: US$4m
Beta: 0.2x
Sector: Industrials
Industry: Capital Goods
Major shareholders:
74% Cho Kun Lau
1% Dimensional Fund Advisors LP
22% Free float
Hap Seng Consolidated Berhad (HAP MK)
 HAP operates in several businesses such as property, plantations, credit financing,
fertilizers, automotive, and others such as quarries and trading
 Property division is involved in the development of residential and commercial properties
in Sabah and West Malaysia. HAP’s commercial properties achieve high occupancy rates of
over 90% and provide around 1,000,000 square feet of rentable area
 Plantations division is engaged in production and distribution of crude palm oil (CPO)
with total area of palm plantation accounting for 40,000 hectares, which is in Sabah. HAP
produced 160k tons of CPO in 2015
 Credit financing division operates under Hap Seng Credit Sdn Bhd with the network
comprising 10 branches nationwide providing term loans and industrial hire purchase
financing to small and medium companies
 Fertilizers trading business is operated through eight warehousing facilities in Malaysia
and five in Indonesia, offering several types of fertilizers used on plantations. HAP has 35%
of the fertilizer market share in East Malaysia and around 17% in Peninsular Malaysia
-
100
200
300
400
500
-
2
4
6
8
10
Aug-13 May-14 Feb-15 Nov-15 Aug-16
HAP MK (LHS)
Price relative to local index
(MYR) (%)
Property 51% Plantations 17% Automotive 3%Credit financing 17% Fertilizers 4% Others 8%

6. 68 August 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
 HAP operates in several businesses such as
property, plantations, credit financing, fertilizers,
automotive, and others such as quarries and
trading
Hap Seng Consolidated Berhad (HAP MK)

7. 78 August 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
 Property division is involved in the development
of residential and commercial properties in
Sabah and West Malaysia
 HAP’s commercial properties achieve high
occupancy rates of over 90% and provide around
1,000,000 square feet of rentable area
Hap Seng Consolidated Berhad (HAP MK)

8. 88 August 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
 Plantations division is engaged in production and
distribution of crude palm oil (CPO) with total
area of palm plantation accounting for 40,000
hectares, which is in Sabah
 HAP produced 160k tons of CPO in 2015
Hap Seng Consolidated Berhad (HAP MK)

9. 98 August 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
 Credit financing division operates under Hap
Seng Credit Sdn Bhd with the network
comprising 10 branches nationwide
 Provides term loans and industrial hire purchase
financing to small and medium companies
Hap Seng Consolidated Berhad (HAP MK)

10. 108 August 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
 Fertilizer trading business is operated through
eight warehousing facilities in Malaysia and five
in Indonesia, offering several types of fertilizers
used on plantations
 HAP has 35% of the fertilizer market share in East
Malaysia and around 17% in Peninsular Malaysia
Hap Seng Consolidated Berhad (HAP MK)

11. 118 August 2016
Background: Hap Seng Consolidated Berhad is a major Malaysian
conglomerate, which was established by the Lau family, its largest
shareholders. Historically, its core business had been palm-oil
plantations, but in recent years, property has become its main
source of profits. Malaysia constitutes 96% of its business, the
rest mainly in Indonesia.
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
Operating profit breakdown, by business segment 2015
Stock information:
Name: Hap Seng Consolidated
Bhd.
Ticker: HAP MK
Price (MYR): 7.75
Mcap: US$4,772m
3MADTO: US$4m
Beta: 0.2x
Sector: Industrials
Industry: Capital Goods
Major shareholders:
74% Cho Kun Lau
1% Dimensional Fund Advisors LP
22% Free float
Hap Seng Consolidated Berhad (HAP MK)
 HAP operates in several businesses such as property, plantations, credit financing,
fertilizers, automotive, and others such as quarries and trading
 Property division is involved in the development of residential and commercial properties
in Sabah and West Malaysia. HAP’s commercial properties achieve high occupancy rates of
over 90% and provide around 1,000,000 square feet of rentable area
 Plantations division is engaged in production and distribution of crude palm oil (CPO)
with total area of palm plantation accounting for 40,000 hectares, which is in Sabah. HAP
produced 160k tons of CPO in 2015
 Credit financing division operates under Hap Seng Credit Sdn Bhd with the network
comprising 10 branches nationwide providing term loans and industrial hire purchase
financing to small and medium companies
 Fertilizers trading business is operated through eight warehousing facilities in Malaysia
and five in Indonesia, offering several types of fertilizers used on plantations. HAP has 35%
of the fertilizer market share in East Malaysia and around 17% in Peninsular Malaysia
-
100
200
300
400
500
-
2
4
6
8
10
Aug-13 May-14 Feb-15 Nov-15 Aug-16
HAP MK (LHS)
Price relative to local index
(MYR) (%)
Property 51% Plantations 17% Automotive 3%Credit financing 17% Fertilizers 4% Others 8%

12. 128 August 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
Operating profit breakdown, by business segment 2015
Property 51%
Plantations 17%
Automotive 3%Credit financing 17%
Fertilizers 4% Others 8%

14. 148 August 2016
HAP: Leadership
Sources: A. Stotz Investment Research, company data, FactSet
Chairman
Managing
Director
2012 2013 2014 2015 Past 12 months
Jorgen Bornhoft (Independent)
Feb 2007 – Present
Edward Lee Ming Foo
Mar 2005 – Present

15. 158 August 2016
'12 '13 '14 '15 PTM
3 2 1 1 1
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
3 2 1 1 1 6 3 4 5 4
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
9 9 9 9 9 2 1 1 1 1 4 10 4 2 3 4 1 1 4 2
Benchmarked against 1,430 large Industrials companies worldwide.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
Source: A. Stotz Investment Research. Notes: 1 = top ranking and 10 = worst. Most recent year’s data is based on the past 12 months (PTM) of published data.
Profitable Growth has
maintained its #1 rank
since 2014
This means HAP ranks
better than 1,287 of 1,430
large Industrials companies
globally
HAP: A. Stotz Profitable Growth
CEO, 2005 – Present
Edward Lee Ming Foo

16. 168 August 2016
'12 '13 '14 '15 PTM
3 2 1 1 1
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
3 2 1 1 1 6 3 4 5 4
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
9 9 9 9 9 2 1 1 1 1 4 10 4 2 3 4 1 1 4 2
Benchmarked against 1,430 large Industrials companies worldwide.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
Source: A. Stotz Investment Research. Notes: 1 = top ranking and 10 = worst. Most recent year’s data is based on the past 12 months (PTM) of published data.
Profitability maintained
its #1 rank and is the main
driver for HAP’s Profitable
Growth rank
HAP ranks among the
best 143 large Industrials
companies globally on ROA
The Growth rank
returned to its #4 rank
from #5 in 2015
HAP: A. Stotz Profitable Growth
CEO, 2005 – Present
Edward Lee Ming Foo

17. 178 August 2016
'12 '13 '14 '15 PTM
3 2 1 1 1
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
3 2 1 1 1 6 3 4 5 4
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
9 9 9 9 9 2 1 1 1 1 4 10 4 2 3 4 1 1 4 2
Benchmarked against 1,430 large Industrials companies worldwide.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
Source: A. Stotz Investment Research. Notes: 1 = top ranking and 10 = worst. Most recent year’s data is based on the past 12 months (PTM) of published data.
Asset utilization has been
ranked #9 since 2012,
while the Profit margin has
been stable at the top
Sales growth fell to #3
from #2
Margin change improved
to #2 from #4
It was an improved
margin rather than higher
sales growth that drove
the Growth rank
HAP: A. Stotz Profitable Growth
CEO, 2005 – Present
Edward Lee Ming Foo

18. 188 August 2016
 Do YOU want to see the Profitable Growth rank
for a company in YOUR portfolio?
 Leave a comment below with company name
and country of listing…and I’ll post it if I have it