www.bursamids.

com

02 June 2017 | Initiation

Spritzer Berhad Buy

A Thirst for Growth Target Price (TP): RM2.83

INVESTMENT HIGHLIGHTS RETURN STATS

Market leader with over 40% market share in Malaysia Price (1 June 2017) RM2.44
Increase production by 20% in next three years
Fair Value RM2.83
Undisrupted profit growth for the past 5 years
Initiate with Buy and TP of RM2.83 Expected Share Price
+16.0%
Return
Business Overview: Expected Dividend Yield +2.3%
Spritzer is a market leader in bottled drinking and mineral water with an Expected Total
annual production capacity of 650 million litres from 15 production lines +18.3%
Return
in three of its plants in Taiping, Shah Alam and Yong Peng. Brands sold
by the company include Spritzer, Cactus, Summer, Tinge and Pop. STOCK INFO
Investment Theses: KLCI 1,763.11
1. Strong brand with over 40% market share in Malaysia. 7103
Bursa / Bloomberg
Spritzer is a household name in Malaysia with a market share of SPZ MK
over 40% for bottled water and over 50% for mineral water. The Board / Sector Main / Consumer
mineral water to drinking water ratio it produces is 70:30. The Syariah Compliant Yes
company has won 69 awards in the past 27 years.
Issued shares (m) 182.58
2. Increase production by 15-20% in next three years. The
company could further increase its production capacity by another Market cap. (RMm) 445.50
15% in the next two to three years through enhancements on its Price over NA 1.52
water production lines. Moreover, management plans to build a
new fully automated warehouse in its Taiping plant to meet the 52-wk price Range RM2.19-RM2.60
increase in sales and production. Beta (against KLCI) 0.63
3. Undisrupted profit growth for the past 5 years. Thanks to its 3-mth Avg Daily Vol 0.21m
dominant market position, Spritzer has been charting undisrupted
growth in the last five years. Its 2012 to 2016 net profit CAGR was 3-mth Avg Daily Value RM0.49m
30%. We expect the company to continue its upward climb in FY18 Major Shareholders (%)
as it solidifies its existing market share while it expands into new
Yee Lee Corporation 31.96
markets.
Valuation: Yee Lee Holdings S/B 12.49

Initiate with BUY recommendation and target price of RM2.83 Dato Lim Kok Boon 6.81
based on 17x FY18F EPS of 16.6 sen. The PER of 17x is a 35% discount
Price Performance (%) Absolute Relative
to the average PER of other beverage companies listed on Bursa such
as Fraser and Neaves, Dutch Lady and Nestle. The discount ascribed is 1 month 2.1 3.0
due to Spritzers smaller market cap. We like Spritzer for its i) resilient 3 months 6.1 3.7
earnings due to its defensive business model, ii) strong position as
12 months -4.3 -11.5
market leader in Malaysias bottled water industry and iii) strong
balance sheet with net cash position as of end-FY16.

MIDF RESEARCH is a unit of MIDF AMANAH INVESTMENT BANK

Kindly refer to the last page of this publication for important disclosures
 MIDF RESEARCH
Friday, 02 June 2017

INVESTMENT STATISTICS
FYE Dec FY14* FY15* FY16** FY17F FY18F
Revenue (RMm) 238.75 253.67 185.94 308.02 335.30
Pretax Profit (RMm) 28.31 31.96 18.27 29.82 40.01
Net Profit (RMm) 21.57 22.81 12.51 22.66 30.41
EPS (sen) 11.81 12.49 6.85 12.41 16.65
EPS growth (%) 12.13 5.75 N/A N/A 34.18
PER (x) 19.53 15.66 N/A 19.66 14.65
Net Dividend (sen) 4.0 5.0 3.5 4.7 5.5
Dividend yield (%) 1.64 2.05 1.43 1.93 2.25
Gearing (x) 0.34 0.18 0.07 0.09 0.09
ROE (%) 11.48 10.58 4.34 7.50 9.42
ROA (%) 7.01 7.32 3.40 6.00 7.58
NTA per share (RM) 1.03 1.18 1.58 1.66 1.77
Price to NTA (x) 2.36 2.06 1.54 1.47 1.38
Source: Company, MIDF Research
*FYE May **May to Dec 2016, seven months only due to change in financial year end

DAILY PRICE CHART

Ng Bei Shan
ng.bs@midf.com.my
03-2173 8461
Source: Bloomberg

2
 MIDF RESEARCH
Friday, 02 June 2017

A. KEY INVESTMENT THESES

One of the local pioneers in the bottled water industry. Spitzers drinking water production business was set up in
1989, held under the private company owned by the Lim family. The family eventually listed the mineral water and
packaging business as Spritzer Bhd in 2000. Spritzer owns two mineral water plants in Taiping, Perak and Yong Peng,
Johor and one distilled water plant at Shah Alam, Selangor. The three plants are strategically located as the Taiping
plant can serve both the northern, west coast and central regions. The drinking water plant in Shah Alam can serve the
central region, which is the most populous zone, while the Yong Peng plant serves the southern and Singapore markets.
These locations are crucial to the distribution of Spritzers products as logistics costs are significant for bottled water as
they are bulky and heavy. The Taiping plant, which sits on a 330-acre parcel, is home to its flagship brand Spritzer. It
has nine production lines in Taiping, three in Shah Alam and three in Yong Peng, Johor. The utilisation rate for all 15
production lines ranges from 70% to 75% with a capacity of 650 million litres per year. The three plants help to mitigate
operational risks compared to companies operating from a single plant.

Exhibit 1: Spritzers flagship mineral water brand contributes over one-third to its sales

Source: Company

Market leader with over 40% market share in Malaysia. Spritzer is a household name in Malaysia with a market
share of over 40% for bottled water and over 50% for mineral water. Brands under its wing includes Spritzer, Cactus,
Summer, Tinge and Pop. It has been a dominant player since establishment as it enters the bottled water market almost
three decades ago. In the past two to three years, its market share expanded to 40%. The mineral water to drinking
water ratio it produces is 70:30. The company has won 69 awards in the past 27 years, inferring that its products are
well received and recognised. Management aims to increase its market share through more advertising and promotional
campaigns. There are two variants of bottled water: mineral water, which is water sourced from underground and
drinking water, which is from treated water provided by Syabas.

Strong brand equity in Spritzer. Its flagship brand which is packaged in the recognisable light green, has been the
number one mineral water in Malaysia, according to market studies by AC Nielsen. The Spritzer range of products
contributes over a-third to the groups overall sales. Spritzer commands a higher margin compared to its other brands as
it is marketed as a more premium product as it is generally priced 8% to 30% higher than its branded competitors. It is
also able to garner volume because it is much more affordable than imported premium brands like Volvic and Evian
because retail prices for Spritzer are about 40% to 60% cheaper. The brand is built through tireless marketing activities
that enhance its brand equity over time. Among some of the strategies adopted include the buying of shelve in
prominent locations. It is also a sponsor for the upcoming SEA Games, which could improve its branding and increase its
exposure to the regional audience.

3
 MIDF RESEARCH
Friday, 02 June 2017

Market share expansion to drive growth. Spritzer commands over 40% of the bottled water market share locally.
Growth opportunities will come from market share expansion as well as increasing its exports. In Malaysia, it targets to
penetrate mamaks and coffee shops through distributors specialising in the segment. Overseas sales account for about
7% of its overall revenue. It exports to Singapore, Hong Kong, Taiwan, Papua New Guinea, Brunei and China. Singapore
is a market where it can tighten its grip while it continues its advertising and promotional efforts in China.

Increase production by 15% to 20% by 2020. The company could further increase its production capacity by
another 20% in the next two to three years through enhancements on its water production lines. There is room for the
company to add two or more production lines in the next three years once its utilisation rate exceeds 75%. Moreover,
management plans to build a new fully automated warehouse in its Taiping plant to meet the increase in sales and
production. We believe that the new warehouse could help to boost its production efficiency due to the easing of the
current bottleneck at its current warehouse in Taiping. We estimate that the new automated warehouse may cost up to
RM50m depending on the layout and machinery specifications. The construction of the new facility will take up to three
years and the investment will be expensed over the period with construction cost funded through internally-generated
funds and some debt. We do not expect the construction of the warehouse to affect its financial position as it is in a net
cash position as of end-2016 while operating cash flow is expected to be robust at RM25m in FY17.

Integrated facilities offer cost advantage. Spritzer is able to maintain reasonable profit margins because of its
integrated facilities that include its in-house manufacturing of packaging products. We understand that packaging makes
up about 70% of its costs of goods sold. Its Taiping plant houses three preform production lines which allow it to
manage it packaging cost better.

Exhibit 2: A birds eye view on Spritzers plant in Taiping

Source: Company

Backed by an established distributor. As a 32.5%-owned associate of Bursa-listed Yee Lee Corp Bhd, Spritzer is
able to tap into its parents wide network of distribution for growth. The symbiotic relationship reduces the risks of
potential contractual disagreements compared to that with other third party distributors. Yee Lee was established in
1968 and has a sales network of 18 branches and distribution facilities throughout Malaysia. Yee Lee has a turnover of
RM1.06b in FY16 and a market cap of RM474m.

4
 MIDF RESEARCH
Friday, 02 June 2017

B. FINANCIAL HIGHLIGHTS
Steady growth in revenue and profit. As a leader in the industry, the company has charted growth above the
industry growth of 6% to 8%, according to market researchers. Notably, Spritzers 5-year CAGR for its revenue is
expected at 8.9% while 5-year net profit CAGR is 9%. The compressed margins in recent quarters are largely attributed
to Spritzers expansion into China. The company has expensed a significant percentage of its advertising and promotion
budget to make an inroad into the Guangzhou market. On top of that, raw material prices have increased by double digit
in the past few quarters. However, we expect raw material prices to stabilise due to the strengthening of ringgit and
crude oil prices that averages at USD53.8 per barrel year-to-date.

Exhibit 3: Revenue and profit trend

400 12.0
%
350
10.0
300
8.0
250
200 6.0 Revenue
RM 'm

150 PATAMI
4.0
100 Net profit margin
2.0
50
0 0.0
Source:

Source: Company, MIDF Research

Sturdy balance sheet. The companys gearing has improved from 0.4x in FY12 to 0.07x in FY16. It has also turned to
net cash position of RM26m in FY16, which is boosted by the conversion of warrants ESOS. We expect its gross gearing
to stay below 0.1x in FY17 and FY18 due to its strong operating cashflow.

Commendable profitability. Spritzers ROE has improved from 7.05% in FY12 to 10.58% in FY15 as due to improving
volume and efficiency. We expect FY17F to register ROE of 7.5% due to higher raw material costs and capital expensed
for the penetration into the China market. We expect FY18F ROE to improve to 9.4% in anticipation of capturing higher
sales locally while Chinas operations improve. Similarly, Spriters PBT margin was enhanced from 8% in FY12 to 12.6%
in FY15. We expect FY17F and FY18F PBT margins at 9.68% and 11.93% respectively.

5
 MIDF RESEARCH
Friday, 02 June 2017

Decent dividends. While the company does not have a formal dividend policy, it has been paying out dividends since
2000. In the past five years, dividend payout ranged from 25% to 51%. We expect the company to pay out about 30%
of its profits in the next two years as it allocates some funds for its new automated warehouse in Taiping. With that we
expect dividend yield of above 2.2% for FY17F and FY18F, assuming payout ratios of 38% and 33% accordingly.

Exhibit 4: Dividend per share and dividend payout

6 60%

5 50%

4 40%

3 30%
DPS
2 20% Dividend payout

1 10%

0 0%

Source: Company, MIDF Research

C. INDUSTRY OUTLOOK
Peers and competition. The bottled water industry is highly competitive and somewhat commoditised due to the low
barrier of entry as there are not many differentiating factors compared to other flavoured drinks. Competition comes
from major beverage companies such as Frasers and Neave which produces Ice Mountain, Cola-Colas Dasani, to smaller
private labels such as Seamaster, La Boost and Eau Claire. Spritzer has been one of the leaders in the industry due to its
head start in the local scene, continuous improvement in refining its products and boosting its branding and marketing
to be in a leading position. Spritzer markets itself as high a high silicon content mineral water to differentiate itself from
other competitors. The numerous awards it won including consumer choices award showed that consumers regard its
brand name highly. New comers with not enough volume and branding will find it hard to challenge a market leaders
position like such. We believe that each brand has its marketing, pricing and distribution strategies to capture the rather
fragmented market.

Change in consumer lifestyle leads to higher demand. The demand for bottled water increases over time as
consumers opt for convenience as their disposable income improves. Health-conscious consumers also switch to buying
drinking water instead of carbonated drinks or sweetened beverages for a more balanced diet.
Event-driven growth. Demand for bottled water usually spike up during special occurrences such water rationing and
haze. During these periods, sales of bottled drinking water jump due to the low supply or scarcity of clean, fresh water.
According to media reports, haze occurred on a yearly basis since 1982. Throughout the 35 years, there were a few
serious occurrences in 1997, 2005 and 2015. Notably, Spritzers quarterly profit doubled yoy during the period of the
haze crisis in 2015.

6
 MIDF RESEARCH
Friday, 02 June 2017

Sales grew despite weaker consumer sentiment. The group owns a few brands with different pricing to cater for
the less brand-conscious and price sensitive consumers. For instance, Cactus mineral water is generally priced at 30% to
40% lower compared to Spritzer on the shelves. Summer drinking water, on the other hand, is normally priced at a 30%
to 40% discount to Cactus. Due to the ranges of products with different pricing point, Spritzers sales are resilient even
as consumer sentiment is weak because it is able to offer lower-priced products at the same time. We also believe that
the bottled water business is recession-proof due to the low prices and water being a necessity.
Exhibit 5: Correlation between Spritzers sales and consumer sentiment

120 90
80
100
70
80 60
50
RM'm

60 Consumer sentiment
40
Spritzer Sales
40 30
20
20
10
0 0
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16

Source: Company, MIDF Research

D. VALUATION
Initiate with BUY recommendation and target price of RM2.83 based on 17x FY18F EPS of 16.6 sen.
Spritzer does not have a direct competitor listed on Bursa. We benchmark it against other food and beverage counters.
The 17x is a 35% discount in PER compared to other beverages companies listed on Bursa such as Fraser and Neaves
Holdings Bhd (23x), Dutch Lady Milk Industries Bhd (25x) and Nestle (Malaysia) Bhd (29x) due to its smaller market cap.

E. RISKS
Spike in raw material prices. About 70% of Spritzers COGS are in packaging. A spike in raw material price will
increase its costs. That said, we do not foresee a huge jump in PET resin prices as crude oil prices average below USD55
per barrel year-to-date.

Prolonged softness in consumer sentiment. A prolonged softness in consumer sentiment will dampen Spritzers
sales as consumers find ways to cut their expenditure. However, we believe that bottled drinking water is a very basic
item at low selling prices, which should not hurt consumers wallet much.

Longer-than-expected gestation period for China expansion. We commend managements drive to search for
growth out of Malaysia. However, we believe the gestation period should be at least 3 years before the Company can
see positive impact from the China market.

Contamination or environmental related issues at its mineral water sources. As Spritzers mineral water source
is from underground water, there might be geological risks. Spritzers water sources are inspected by the Health Ministry
and other relevant authorities periodically and it is certified by the HACCP (Hazard Analysis Critical Control Point) System
and achieves ISO standards.

7
 MIDF RESEARCH
Friday, 02 June 2017

Income Statement (RM m) 2014* 2015* 2016** 2017F 2018F Balance Sheet (RM m) 2014* 2015* 2016** 2017F 2018F
Revenue 238.75 253.67 185.94 308.02 335.30 PPE 197.26 204.09 221.26 226.21 237.79
EBITDA 43.12 46.85 27.10 44.72 55.77 Others 4.16 4.39 4.39 4.39 4.39
Profit Before tax 28.31 31.96 18.27 29.82 40.01 Non-current Asset 201.42 208.48 225.66 230.60 242.19
Tax expense -6.75 -9.16 -5.76 -7.16 -9.60 Inventories 27.42 23.94 36.56 32.91 35.83
Net Profit 21.57 22.81 12.51 22.66 30.41 Receivables 66.03 57.89 58.79 73.42 79.92
Earnings per share (sen) 11.81 12.49 6.85 12.41 16.65 Others 3.76 6.24 27.91 28.01 32.79
Dividend per share (sen) 4.0 5.0 3.5 4.7 5.5 Cash 8.98 15.19 18.58 13.02 10.43
PER (x) 20.66 19.53 35.62 19.66 14.65 Current Asset 106.20 103.26 141.84 147.36 158.96
TOTAL ASSETS 307.62 311.74 367.50 377.96 401.15
Cash Flow Statement (RM m) 2014* 2015* 2016** 2017F 2018F Share capital 67.43 70.75 89.79 89.79 89.79
Profit for the year 21.57 22.81 12.51 22.66 30.41 Treasury shares -0.01 -0.01 -0.01 -0.01 -0.01
Depreciation 11.31 12.16 8.03 13.05 13.41 Reserves 120.38 144.81 198.48 212.53 232.90
Finance cost 3.50 2.73 0.81 1.85 2.35 TOTAL EQUITY 187.79 215.55 288.26 302.30 322.68
Others 8.14 12.20 5.84 8.36 10.80 Borrowings 16.47 6.45 9.57 8.10 8.88
OP before in WC 44.52 49.91 27.18 45.92 56.97 Others 17.45 18.04 17.84 15.00 14.00
in inventory -2.15 3.58 -6.13 3.65 -2.91 Non-current liabilities 33.91 24.49 27.41 23.10 22.88
in receivables -5.31 7.48 10.17 -14.63 -6.50 Payables 21.09 25.87 25.20 32.76 34.12
in payables -0.21 3.06 -11.12 -7.56 -1.37 Borrowings 55.02 35.80 10.48 18.68 20.37
Others 3.12 -1.49 6.22 3.40 3.40 Others 9.81 10.03 16.15 1.12 1.10
Tax -5.65 -7.08 -4.03 -7.16 -9.60 Current liabilities 85.92 71.70 51.83 52.56 55.59
Cash from Operations 34.34 55.46 22.30 23.62 39.99
TOTAL LIABILITIES 119.83 96.19 79.24 75.66 78.47
Purchase of PPE -23.69 -17.16 -14.00 -18.00 -25.00
Others 0.19 -2.12 -19.13 -5.00 -3.00 Ratios 2014* 2015* 2016** 2017F 2018F
Cash from Investment -23.49 -19.28 -33.12 -23.00 -28.00 Profitability ratios (%)
Return on Equity 11.48 10.58 4.34 7.62 9.39
Net Borrowings -1.57 -4.31 28.31 3.80 3.80 Return on Assets 7.01 7.32 3.40 6.11 7.54
Others -3.24 -20.13 -6.94 -1.35 -8.35 Liquidity ratios (x)
Dividends -5.31 -5.55 -9.62 -8.61 -10.03 Current ratio 1.24 1.44 2.74 2.90 3.05
Cash from Financing -10.12 -29.99 11.75 -6.16 -14.58 Quick ratio 0.92 1.11 2.03 2.27 2.41
Debt-to-equity 0.34 0.18 0.07 0.09 0.09
in cash 0.73 6.19 0.93 -5.54 -2.59 Profit margin (%)
Beginning cash 8.17 8.93 17.55 18.56 13.02 PBT Margin 11.86 12.60 9.83 9.96 11.78
Ending Cash 8.90 15.12 18.47 13.02 10.43 Net profit margin 9.03 8.99 6.73 7.57 8.95
Source: Company, MIDF Research

8
 MIDF RESEARCH
Friday, 02 June 2017

APPENDIX

Exhibit 6: Major Corporate Milestones

Year Event
1989 Started bottled water business
1994 Moved to current Taiping, Perak plant
2000 Listed on Bursa
2001 Acquired Yong Peng, Johor plant
2009 Acquired Shah Alam plant
April 2016 Started selling bottled water in China
Source: Company

Exhibit 7: Corporate Structure

Company
Angenet Sdn Bhd
Chuan Sin Sdn Bhd
Chuan Sin Cactus Sdn Bhd
Golden PET Industries Sdn Bhd
PET Master Sdn Bhd
Spritzer (Hong Kong) Pte Ltd
Spritzer Ecopark Sdn Bhd
Source: Company
Business
Manufacturing and selling of bottled water
Manufacturing of bottled water and beverage
Distribution of bottled water and other customer products
Manufacturing and selling preforms, PET bottles, caps, toothbrushes and other plastic
products
Manufacturing and selling preforms
Owns Spritzer (Guangzhou) Trading Ltd that sells and distributes bottled water
Recreational facility

9

Exhibit 8: Management Profile
Management
Dato Lim A Heng@ Lim
Kok Cheong
Non-independent and non-
executive chairman
Malaysian, male, age 72
Dato Lim Kok Boon
Managing director
Malaysian, male, age 62
Lim Seng Lee
Executive director and Group
CEO
Malaysian, male, age 41
Chuah Chaw Teo
Executive director
Malaysian, male, age 65
MIDF RESEARCH
Friday, 02 June 2017
Profile
Dato Lim has more than 42 years of experience in the trading and manufacturing of
edible oils and consumer products industry.
He is the Executive Chairman of Yee Lee Corporation Bhd and the Chairman of Yee
Lee Organization Bhd. He is a director and major shareholder of Yee Lee
Corporation Bhd; and a director of Yee Lee Holdings Sdn Bhd; He is the spouse of
Datin Chua Siok Hoon, all of whom are the major shareholders of the
Company. Besides, he is a brother of Dato Lim Kok Boon and the uncle of Lim Seng
Lee and Lim Hock Lai.
Dato Lim has been involved in the sales and distribution ofbiscuits, confectionery and
bottled drinks since 1979. He was instrumental in the growth of Chuan Sin Sdn Bhd, a
wholly-owned subsidiary of the Company, when it successfully switched to the
production of bottled water in 1988. Since then, he has been overseeing the entire
day-to-day operations of Spritzer Bhd.
He is a brother of Dato Lim Kok Cheong and the brother-in-law of Datin Chua Siok
Hoon, both are the major shareholders of the Company. He is the spouse of Datin Lai
Yin Leng and the father of Lim Seng Lee and Lim Hock Lai.
Mr Lim was appointed to the board in 2015. He was redesignated to Group CEO with
effect from April 28, 2016. He graduated with a Bachelor of Science in International
Business from San Francisco State University, United States. He joined Spritzer Bhd as
a Sales Executive in 2003, was promoted to Marketing Manager in year 2007 and he
has been involved in sales and marketing activities in the bottled water market. In
2008, he took the position of Deputy General Manager and was responsible to assist
the Managing Director and General Manager to plan and set up the companys policy
and objectives. At the same time, he was involved in strategic planning and Corporate
Social Responsibility of the Company. In 2011, he was promoted to be the Group
General Manager and responsible to oversee and ensures the overall operation
activities of the Group are in accordance with the Groups policies and objectives.
He is a son of Dato Lim Kok Boon and Datin Lai Yin Leng. He is also a nephew of
Dato Lim Kok Cheong and Datin Chua Siok Hoon, both of whom are the major
shareholders of the Company. He is also the brother of Lim Hock Lai.
Mr Chuah was appointed to the Board on May 16, 1994, Mr Chuah graduated with a
Bachelor of Science (Honours) Degree in 1975 and Doctorate in Applied Organic
Chemistry in 1979 from University of Otago, New Zealand.
He worked as a teaching assistant in Polymer Laboratory, State University of New
York from 1980 to 1982 and as a Research Associate in University of Malaya in 1982.
From 1983 to June 1997, he worked for Yee Lee Corporation Bhd in various capacities
as Chief Chemist, Research and Development Manager and later as General Manager
of Research and Development Department. He joined Chuan Sin Sdn Bhd as its
General Manager in July 1997 and responsible for the product development, quality
control and improvement of Chuan Sin Sdn Bhds products. He was a member of the
Committee set up by SIRIM in 1991 to produce a draft on Malaysian Standards
Specification on Natural Mineral Water. Presently, he is the Chairman of the
Federation of Malaysian Manufacturers Bottled Water Group and also the Chairman of
the Environmental and Technical Committee of the Asia Middle East Bottled Water
Association (ABWA). He is a Fellow of the Institute of Kimia Malaysia (IKM)
since September 2014. Besides, he is a member of the Industry Advisory Panel for
Applied Chemistry Programme at the Universiti Teknologi Petronas (UTP). He is a
Director of Hovid Berhad.
10
 MIDF RESEARCH
Friday, 02 June 2017

Lam Seng Mr Lam was appointed to the Board on December 28, 2001. He has more than 30
Executive director years of experience in the manufacturing and marketing of plastic products and
Malaysian, male, age 67 toothbrush. He is the Deputy President of Perak Hock Kean Association and Vice
Chairman of Poi Lam High School, Secondary School, and Primary School. Prior to
joining Golden PET Industries Sdn Bhd, a wholly-owned subsidiary of the Company,
he was the Sales Manager of United Plastic Sdn Bhd, a
plastic manufacturing company from 1973 to 1980.
Chok Hooa@ Chok Yin Fatt Mr Chok is a Malaysian and was appointed to the Board on December 28, 2001. He
Non-independent Non- graduated with a Bachelor Degree in Business Studies from Curtin University of
Executive Director Technology, Australia and Master in Business Administration from University of
Malaysian, male, age 70 Strathclyde, United Kingdom. He is a Chartered Accountant of the Malaysian Institute
of Accountants, fellow members of CPA Australia and Malaysian Institute of Chartered
Secretaries and Administrators and a member of the Malaysian
Institute of Certified Public Accountants. He has extensive experience in the field of
financial management, accounting and corporate secretarial functions. He was
attached to UAC Berhad from 1974 to 1982. In 1982, he joined Yee Lee Corporation
Bhd as Chief Accountant and was promoted to the Board as an Executive Director in
1990. He is a Director of OKA Corporation Bhd and Yee Lee Corporation Bhd, and
other public companies which are not listed on the Bursa Malaysia Securities Berhad
including Yee Lee Organization Bhd and MSHK Corporation Bhd. He is also the
Chairman of the Remuneration Committee and a member of the Audit Committee of
the Company.
Dato IR. Nik Mohamad Dato Ir. Nik Mohamad Pena was appointed to the Board on July 14, 1997. He
Pena bin Nik Mustapha obtained a Degree of Bachelor of Science (Civil Engineering) from University of
Independent non-executive Glasgow, United Kingdom in 1975. He holds the
director memberships in the following professional bodies, namely the Board of Engineers
Malaysian, male, age 66 Malaysia, Institution of Engineers Malaysia, Institution of Highways and
Transportation United Kingdom and Association of Consulting Engineers Malaysia. He
advises the Board members on all matters relating to civil and structural aspect of the
Groups buildings. He is a consultant engineer and the Managing Director of Nik Jai
Associates Sdn Bhd, a company of civil and structural engineering consultants. He
started his career as a civil engineer with Jabatan Kerja Raya (JKR) in 1975 and was
promoted to the post of Senior Executive Engineer in 1980. He left JKR in 1983 and
joined an engineering consulting firm. In 1985, he set up his own partnership firm,
Nik Jai Associates. In 1990, he incorporated his company, Nik Jai Associates Sdn Bhd
which specialises in multi-storey buildings, highways, bridges and water resources.
He is a Director of Yee Lee Corporation Bhd, the Chairman of the Audit Committee
and Nomination Committee of the Company.
Dato Mohd Adhan bin Dato Mohd Adhan was appointed to the Board on May 16, 1994. He graduated with a
Kechik Bachelor of Laws (Honours) Degree and Master of Laws Degree from University of
Independent non-executive Malaya. He is currently the Chairman
director of the National Kenaf and Tobacco Board (Lembaga Kenaf dan Tembakau Negara).
Malaysian, male, age 61 He is a lawyer by profession. Currently, he is practising as a partner at Messrs Adhan
& Yap. Prior to setting up his own private practice in Kota Bharu, Kelantan in 1984, he
was attached to the Legal and Judicial Department for five years serving in the
Magistrate Court, High Court, Public Trustees office and Attorney Generals office
before being appointed the Legal Adviser to the Ministry of Transport in 1983. He also
served the State Government of Kelantan for four years as Menteri Besars political
secretary from 1986 to 1990. He is an elected State Assemblyman of Kelantan for
Kemahang from 1995 to 1999 and Bukit Bunga since 2004. He is a Director of Yee
Lee Corporation Bhd, a member of the Audit Committee, Nomination Committee and
Remuneration Committee of the Company

11

Kuan Khian Leng
Independent non-executive
director
Malaysian, male, age 41
Sow Yeng Chong
Group Financial Controller
Malaysian, male, age 60
Lim Hock Lai
Sales and operations director
Malaysian, male, age 39
Chong Mee Yoong
Deputy general manager
Malaysian, female, age 52
Source: Company
MIDF RESEARCH
Friday, 02 June 2017
Mr Kuan is a Malaysian was appointed to the Board on January 25, 2007. He
graduated with a Bachelor in Civil Engineering (First Class Honours) and Master in
Management Science & Operational Research from University of Warwick,
United Kingdom. He started his career as a Civil and Structural Engineer in Sepakat
Setia Perunding Sdn Bhd in year 2000. In March 2002, he joined Citibank Berhad as
Assistant Manager and subsequently held several managerial positions in the
Marketing, Project Management and Risk Management departments. In July 2006, he
held the position of Business Intelligence Head in Kuwait Finance House (Malaysia)
Berhad. He served as the Executive Director of Mexter Technology Berhad from June
2007 to December 2015, overseeing the operations, business development and
marketing activities of the company. At present, he is the Group Executive Director of
Fajarbaru Builder Sdn Bhd, which is involved in large scale construction and property
development. He is also a Council Member of Master Builders Association Malaysia
(MBAM). Currently, he is a member of the Audit Committee, Nomination Committee
and Remuneration Committee of the Company
Sow Yeng Chong joined Spritzer Bhd in October 2009 as the Group Financial
Controller. He also serves as Joint Company Secretary of the Company since 2010.
He has wide working experience in the field of accounting and corporate finance.
He started his career in 1981 as an Audit Assistant with Payne Davies & Co. and
subsequently worked as an Accountant of Far East Marble & Handicraft Sdn Bhd. He
was employed by Yee Lee Corporation Bhd from 1985 to 1997 in various capacities
and his last position being the Group Financial Controller and Joint Company
Secretary. He was a remisier with TA Securities Holdings Bhd from 1997 to 2009.
He is a Non-Independent Non-Executive Director of Yee Lee Corporation Bhd, a
company listed on the Main Market of Bursa Malaysia Securities Bhd. He is also a
director of Kumpulan Belton Berhad, a non-listed public company. He is also a
member of Malaysian Institute of Accountants.
Mr Lim joined Chuan Sin Sdn Bhd in September 2008 as the Business Manager. He
was promoted to Head of Sales and Marketing in August 1, 2009 and responsible in
Sales and Marketing activities in bottle water market of the Group. Currently, he is
holding the position as a Sales and Operations Director since July 1, 2013 and is
responsible for the sales and performance of Chuan Sin Sdn Bhd, Shah Alam branch
and Angenet Sdn Bhd. He graduated with a Bachelor of Information Systems from
Swinburne University of Technology at Melbourne, Australia. He joined Nagase & Co.,
Ltd, a Japanese trading company as a Sales Executive and subsequently joined
Clariant International Ltd, a Swiss chemical company as a Sales Manager prior to
joining Chuan Sin Sdn Bhd in 2008. He is a son of Dato Lim Kok Boon
and Datin Lai Yin Leng. He is also a nephew of Dato Lim Kok Cheong and Datin Chua
Siok Hoon, both of whom are the major shareholders of the Company. He is also the
brother of Lim Seng Lee.
Ms Chong joined Chuan Sin Sdn Bhd in 1991 as a Food Technologist and currently
holding the position as the Deputy General Manager of Chuan Sin Sdn Bhd since July
2013. She oversees the plant operations and Quality Assurance Department of Chuan
Sin Sdn Bhd. She graduated with a Bachelor of Science (Hons) in Food Science and
Nutrition from National University of Malaysia. Prior to joining Chuan Sin Sdn Bhd, she
worked as a Food Technologist with Yee Lee Corporation Bhd in 1990.
12
 MIDF RESEARCH
Friday, 02 June 2017

MIDF RESEARCH is part of MIDF Amanah Investment Bank Berhad (23878 - X).
(Bank Pelaburan)
(A Participating Organisation of Bursa Malaysia Securities Berhad)

DISCLOSURES AND DISCLAIMER

This report has been prepared by MIDF AMANAH INVESTMENT BANK BERHAD (23878-X) pursuant to
the Mid and Small Cap Research Scheme (MidS) administered by Bursa Malaysia Berhad. This report
has been produced independent of any influence from Bursa Malaysia Berhad or the subject company.
Bursa Malaysia Berhad and its group of companies disclaim any and all liability, howsoever arising, out
of or in relation to the administration of MidS and/or this report. It is for distribution only under such
circumstances as may be permitted by applicable law.
Readers should be fully aware that this report is for information purposes only. The opinions contained
in this report are based on information obtained or derived from sources that we believe are reliable.
MIDF AMANAH INVESTMENT BANK BERHAD makes no representation or warranty, expressed or
implied, as to the accuracy, completeness or reliability of the information contained therein and it
should not be relied upon as such.
This report is not, and should not be construed as, an offer to buy or sell any securities or other
financial instruments. The analysis contained herein is based on numerous assumptions. Different
assumptions could result in materially different results. All opinions and estimates are subject to
change without notice. The research analysts will initiate, update and cease coverage solely at the
discretion of MIDF AMANAH INVESTMENT BANK BERHAD.
The directors, employees and representatives of MIDF AMANAH INVESTMENT BANK BERHAD may
have interest in any of the securities mentioned and may benefit from the information herein.
Members of the MIDF Group and their affiliates may provide services to any company and affiliates of
such companies whose securities are mentioned herein This document may not be reproduced,
distributed or published in any form or for any purpose.

MIDF AMANAH INVESTMENT BANK : GUIDE TO RECOMMENDATIONS

STOCK RECOMMENDATIONS

BUY Total return is expected to be >15% over the next 12 months.

Stock price is expected to rise by >15% within 3-months after a Trading Buy rating has been
TRADING BUY
assigned due to positive newsflow.

NEUTRAL Total return is expected to be between -15% and +15% over the next 12 months.

SELL Total return is expected to be <-15% over the next 12 months.

Stock price is expected to fall by >15% within 3-months after a Trading Sell rating has been
TRADING SELL
assigned due to negative newsflow.

SECTOR RECOMMENDATIONS

POSITIVE The sector is expected to outperform the overall market over the next 12 months.

NEUTRAL The sector is to perform in line with the overall market over the next 12 months.

NEGATIVE The sector is expected to underperform the overall market over the next 12 months.

13