Asiamoney Best Managed Company Awards 2015

Asiamoney is pleased to present its choices for Asia’s Best Managed Companies 2015. The winners were the firms that impressed us the most through a combination of factors including innovation, financial performance and strategic execution, and after also surveying the views of regional analysts and investors. Our congratulations to all those chosen.

  • By Asiamoney
  • 23 Sep 2015
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AUSTRALIA

BEST SMALL CAP COMPANY

Sigma Pharmaceuticals

Sigma Pharmaceuticals, a pharma wholesaler and distributor in Australia, is nothing if not ambitious. The last two years have seen it expand through the acquisition of Central Healthcare Services, which brought with it the Pharmasave and Chemist King pharmacy brands, as well as buying Discount Drug Store.

So successful have those businesses been since acquisition that the company has had to increase a contingency payout related to the purchases, a situation that CEO Mark Hooper has acknowledged as "counter intuitive".

Nonetheless, the current management team is considered to be effective. There have been occasions in the past when shareholders have been disgruntled at the performance of acquisitions, but Hooper — who has been in post since 2010, having previously been CFO of Sigma in 2001-2006 — has presided over a period of success in recent years.

sep15 BMC1
Just what the doctor ordered

Sigma has stood out for its efficient working capital management, say analysts, as well as for its recent strategy to diversify away from revenues related to the country's Pharmaceutical Benefits Scheme, a state programme that provides subsidised medicines.

First half results for the current financial year, announced just before Asiamoney went to press, showed underlying revenues up 11.5% and earnings before interest and taxation up 23.5%.

BEST MEDIUM CAP COMPANY

Charter Hall Group

Since launching in 1991, property owner and manager Charter Hall has accumulated a portfolio that now stands at A$14.5bn. Capital deployment and balance sheet management are the areas where the company gets particular plaudits.

"The group is successful at raising capital and deploying it better than any other real estate manager in the last few years," says one local analyst focusing on property names.

Analysts say a lot of the credit for that goes to CEO David Harrison, at the firm since 2004. "The business is about matching equity and assets, and he is one of the best guys in the market for doing that," says one.

When Harrison joined the company, it managed just A$500m. In recent years he is credited with having restored a focus on core assets, particularly with long leases.

It is also actively building up its industrial portfolio, as part of a plan over the last three years to capture strong fundamentals. In the last three months alone it has acquired A$700m of assets to take its industrial and logistics funds under management to A$3.5bn.

BEST LARGE CAP COMPANY

CSL

Absolute share price levels mean little outside their historical and market context. But that does not mean they have zero significance to investors.

So when CSL passed through the A$100 level for the second time in its history this year — having been the first Australian stock to do so back in 2007, after which the company carried out a stock split — the landmark attracted attention again.

"It is the market darling, and no surprise," says one analyst. "It's very cash generative and the share price generally always goes up."

It helps that CSL is a leader in its field, which is biotherapeutics — specifically, blood plasma products, vaccines and antivenoms. Its acquisition this year of the vaccine business of Switzerland's Novartis has made CSL the second largest influenza vaccine provider in the world.

Net profits rose 6% to $1.379bn in the financial year ended June 30 2015, and were up 10% on a constant currency basis. The company also wrapped up a A$950m buyback and paved the way for another — analysts note that management is focused on earnings per share.

"It is a dominant global leader in an underpenetrated market," says another analyst.

BEST EXECUTIVE

Chris Rex, CEO, Ramsay Health Care

As chief executive of Ramsay Health Care since 2008, after 13 years as the company’s chief operating officer, Chris Rex knows everything there is to know about The Ramsay Way, the company's philosophy of care. It's why analysts consider him a fine custodian of the hospital management company that was established by Paul Ramsay back in 1964.

He gets investors, too. "He stands out for his ability to speak the language of investors," says one analyst covering the sector. "He explains things well."

Rex has had plenty of projects to explain over the years, having executed a growth strategy that has included major acquisitions and taken the company to the top five in its sector in the world.

Before moving to Australia in 1988 to join Macquarie Hospital Services, Rex worked in the UK's National Health Service before switching to private health insurer Bupa. He joined Ramsay in 1995.

His big move in the past financial year was the acquisition of Generale de Sante, a French hospital operator, taking the company to a leading position in the country. But other foreign operations are firing on all cylinders too, with a 15% jump in earnings before interest and taxation in its UK business on the back of double digit growth in NHS admissions.

Other markets include Indonesia and Malaysia, as well as its market leading position in Australia.


CHINA

BEST SMALL CAP COMPANY

TCL Communication TechnologyHoldings

For mobile device vendors, a key metric is average selling price (ASP). Like many other firms in the sector, TCL Communication is feeling the pressure on that score, but it has been able to attract praise for its outstanding portfolio of products, which are marketed under the TCL and Alcatel One Touch brands.

Analysts like the Hong Kong-listed firm's "good product design" and its innovation, as well as its easy access to management and a consistent earnings delivery. Another says that management has "positioned the company well in a highly competitive market".

ASP fell in the first half of the year on an overall basis, attributed to a phone mix where premium phones played a smaller part — at a product level, ASP changed little. Management expects new launches to raise ASP in the second half, however.

TCL sells its devices in more than 100 countries worldwide. This is a competitive field, and although TCL has separate strategies to deploy in specific regions, some analysts caution that the volume figures that have made it one of the fastest growing companies in its sector may be challenging to sustain. The next 12 months will show whether the market has turned.

BEST MEDIUM CAP COMPANY

Sunny Optical Technology Group

Whether for dashboard cameras, action video-making or the ubiquitous smartphone camera: today's consumers and professionals are driving a demand for high quality imaging devices. Sunny Optical, listed in Hong Kong and with five production sites in mainland China, is well placed to benefit.

Analysts praise its execution in the optical lens business, traditionally one considered to have high barriers to entry, but they also commend it for the transparency of its investor relations.

The company says it saw a lower pace than expected in the first half of the year, partly as a result of a weaker domestic economy. But although Sunny Optical can expect to see growth from increasing demands for higher specification lenses on smartphones, it also has a few hedges against a downturn in mobile volumes.

It is a big player in vehicle imaging, an area where regulatory requirements can provide plenty of business. US and European Union authorities have brought in various rules requiring cameras or other imaging devices such as those that help keep motorway drivers in the correct lane to be fitted to vehicles.

Such applications also sit alongside the company's security imaging business. There's plenty of money to be made keeping people on the straight and narrow.

BEST LARGE CAP COMPANY

China Telecom Corporation

China Telecom is the clear favourite of analysts in this category. The litany of praise is a long one, ranging from execution of vision to communication through investor relations.

"China Telecom has a strong track record of executing on its strategy and delivering shareholder value," says one.

Getting that message out clearly and transparently matters too. "China Telecom has the best transparency and company guidance of all the companies that I cover," says another analyst. No wonder that more than 60% of analysts covering the stock have it as a buy.

The company is having to weather domestic challenges, however. Reform of value added tax and reductions in tariffs have contributed to first half results that are either flat or fractionally down.

But it is counting on big payback from the development of its 4G services, which it hopes will benefit from China's "Internet+" project, a government-driven initiative that is transforming the way in which people conduct everyday business, from ordering domestic appliances to paying for taxi fares.

BEST EXECUTIVE

Xiaochu Wang, chairman and CEO, China Unicom

When Asiamoney made its decisions for this year's Best Managed Company awards, Xiaochu Wang was still chairman and CEO of China Telecom. Until, that is, he resigned in August this year to join rival China Unicom, swapping places with Xiaobing Chang.

The move was part of a broader reshuffle of the three big Chinese state telecoms firms, which also include China Mobile.

For Unicom, the move ought to prove a good one. During his tenure at China Telecom, Wang developed an excellent reputation for competence and for driving growth. He will be expected to help push the same agenda at Unicom as the country's telecoms sector grapples with government demands to upgrade infrastructure and service quality to subscribers.

Investors ought to welcome the transparency and vision that he was credited with at China Telecom, leading "an enterprising management team".

Wang's biggest challenge may be yet to come, however. State owned enterprise reform is on the agenda.


HONG KONG

BEST SMALL CAP COMPANY

Far East Consortium International

The winning firm in this category was the overwhelming choice of analysts, and with good reason. Far East Consortium International's property development business is well diversified, both geographically and in terms of property type. In particular, the firm's performance is correlated to the rise of the middle class in markets like China, which it targets through its "China Wallet" strategy.

Sep15 BMC2Analysts heap praise on its "exceptional investor relations effort", as well as its "well managed financial performance". Profits have grown three-fold in the last five years, notes one, with a compound annual growth rate of 24%.

As well as in China, FECIL operates in Hong Kong, Singapore, Malaysia, Australia and London. It has a development pipeline of about 11m square feet and its geographic diversity helps it stay nimble amid property markets with different dynamics.

Properties that it bought at the trough of the Singapore market it was able to sell at the later peak. Equally it was able to secure land in Shanghai and Guangzhou at very low prices.

Broader worries over Chinese economic growth have taken their toll on stocks pegged to China spending in recent months, but FECIL still outperforms the market. Its geographic diversity should ensure it continues to do so.

BEST MEDIUM CAP COMPANY

PAX Global Technology

It doesn't take much imagination to foresee a time when electronic payment terminals can be used almost anywhere in the world to pay for almost anything you might want to buy. One firm sitting pretty as that happens is PAX Global Technology, which has so far provided its customers with more than nine million e-payment terminals.

The third largest e-payment terminal provider in the world, it is also by far the best managed mid cap company in Hong Kong according to analysts. They say it is "excellent in all aspects", shows "consistency and integrity" and "a well thought out strategy and execution".

For others, PAX is a rare example of a China operation with cutting edge technology that is endorsed globally by clients. That is backed up by its market share gains across the world — from 2009 to 2014, global market share grew from 2% to 10% and the company is regularly identified as the fastest growing in its industry.

The company was founded in 2000 as a subsidiary of Hi Sun Group, a payments processing company that also operates in the areas of power metering and telecoms. PAX was spun off in December 2010, with its headquarters in Hong Kong and operations in Shenzhen. It has a US subsidiary in Florida.

BEST LARGE CAP COMPANY

Hong Kong Exchanges and Clearing (HKEx)

Hong Kong's stock exchange operator has had a momentous year. Under its energetic and personable chief executive Charles Li, it has presided over the successful launch of the Shanghai-Hong Kong Stock Connect, a trading scheme that allows investors in both markets to trade stocks listed on each.

The scheme is the most high profile development within what has been a busy period for HKEx, which also owns the London Metals Exchange (LME). Consultations with market participants have continued as the operator seeks to improve operations in Hong Kong as well as warehouse reforms from the LME.

HKEx reported average daily volumes for derivatives contracts substantially up in the first half of the year compared to the previous year, while securities average daily trading was almost double the 2014 figure. IPO and follow-on activity is on track to beat last year's total, and commodity trading volume is only slightly lower than the previous year.

All of which adds up to an impressive performance. HKEx reported its highest ever half-yearly revenues and net profits, which were up 48% and 73%, respectively. As an exchange operator, HKEx needs activity more than rising markets to generate cash, and the year 2015 began with fresh impetus around Chinese market liberalisation and the recent launch of the Stock Connect, before also seeing immense volatility sparked by worries over China's domestic market.

Those worries might possibly delay plans to extend the Stock Connect to Shenzhen, but when that scheme does get off the ground, HKEx will have added another important element to its mission to retain relevance as China opens up.

BEST EXECUTIVE

Chris Lee, CFO, PAX Global Technology

When investors rave about PAX Global, their comments often come back to management, and to CFO Chris Lee in particular. He is seen as crucial not only to the financial strategy and management of the firm but also its culture of transparency.

"There is constant communication with investors, no matter whether a good or bad time," says an analyst. Others praise the part he plays in the visionary leadership provided the senior management team.

What is remarkable is that unlike some of the other winners of the Best Executive award, Lee has not been long at his current employer. He only joined in 2011, as group financial controller. Before that, he worked at a family-owned investment firm, and he has also worked at Harvest Capital Partners, a China real estate private equity fund, as well as at Fortis Bank, Deloitte and Ernst & Young.

His background has clearly given him what he needs to impress those tracking the company. Another analyst hails the "exceptional efforts from CFO Chris Lee" in the company's continuous delivery of a robust business performance. The company's mission is to be a "leading global player". Chris Lee has helped make that a reality.


INDIA

BEST SMALL CAP COMPANY

Orient Cement

A lean approach to costs is what sets Orient Cement apart in the eyes of many, alongside "clarity of vision from senior management", in the words of one analyst. "A consistent cost leader," says another.

Another highlights efficiency of process: the fact that the company is set to commission a three million tons per annum capacity in record time — about two years. This will take it into a bigger league, and possibly into the medium cap category before too long, adds that analyst.

The sector can be a tough one in which to succeed, and Orient is no stranger to disappointments. Its first quarter figures for the 2016 financial year showed a fall in revenues of 8% year on year, partly because of weakness in Maharashtra, and more broadly pressure on demand and pricing.

But that is a sector story, rather than a tale of one firm's difficulties. The new capacity that is set to come on stream imminently is its new plant at Karnataka, and this is expected to give it a boost.

In tough conditions, though, cost discipline wins out. Orient is the lowest cost cement producer — up to 20% lower than the industry average, by some estimates. It is aiming for total capacity of 15mt per annum by 2020, compared to just 8mt now. Those plans will dent its balance sheet, but so long as it stays efficient, Orient should ride the storm better than most.

BEST MEDIUM CAP COMPANY

JSW Steel

Times are challenging for India's steelmakers. Raw material sourcing is not always easy, even if iron ore prices are falling. Falls in the price of the end product, largely driven by competitive offerings from Russia and China, also don't help. Imports threaten domestic producers' position.

JSW Steel is not the biggest of India's players in the sector, but analysts like its strategy and its ability to respond to pressure.

One comments that the company has been "gaining market share through superior marketing efforts and quick expansions", and that it has performed consistently despite tough market conditions. Another says: "Steel is capital intensive and despite that JSW Steel has managed to commission capacity at low cost. The cost structure is lean."

JSW Steel is more focused on the domestic market than a firm like Tata Steel. It was launched in 1982 as the Jindal Iron and Steel Company by parent group JSW, before a merger with Jindal Vijayanagar Steel in 2005.

Analysts think that realisations could fall in 2016, but at the same time they reckon that JSW Steel will benefit from lower raw material costs, its high quality product mix and its efficiency.

BEST LARGE CAP COMPANY

Sun Pharmaceutical Industries

Once in a while a deal is completed that takes a company to a different level. Such transactions are challenging, bold, productive and rare. Sun Pharma's $4bn acquisition of Ranbaxy this year is firmly in this category and is illustrative of the pioneering approach of what is now the world's fifth largest specialty generic pharma company.

Analysts also point to it as a perfect example of the enlightened strategy of managing director Dilip Shangvi, who founded Sun Pharma in 1983. "His focus on ensuring shareholder returns and willingness to explore new paths to extract value is unparalleled," says one.

The Ranbaxy deal is not the only new path taken recently by Shangvi. Another identified by observers is his decision last September to acquire global marketing rights for a Phase III molecule, the psoriasis drug tildrakizumab, created by Merck. Sun paid $80m upfront and will spend another $250m on development and safety trials over the next five years.

Such bold moves underpin the company's top-class reputation. They also drive its bottom line. Net profits in the latest financial year were 2.5 times the level of five years ago.

"It continues to be the yardstick by which all other pharmaceutical managements and companies need to be measured," concludes one analyst.

BEST EXECUTIVE

Siddhartha Lal, CEO, Eicher Motors

There is something about motorbikes that attracts obsessives. It's not enough just to own one as a means of getting from A to B. Frequently the practicality is simply a by-product of the passion.

For Siddhartha Lal, now CEO of Eicher Motors but who began his career with the group in 2000 as CEO of motorbike subsidiary Royal Enfield, that passion has driven an extraordinary evolution.

It has been a controlled development, though. Analysts note the company's financial prudence — it carries no debt to speak of. It also has "great corporate governance" leading to "strong wealth creation".

Lal became COO of Royal Enfield's parent group in 2004, and promptly sold more than a dozen business lines. Trucks became a focus, although his beloved motorbikes were also preserved — and developed.

But he has also been fired with a passion for useful new ideas. The company now has a joint venture with Polaris Industries of the US that has developed a cheap multipurpose vehicle that is tailor-made to deal with any challenge India's infrastructure can throw at it.

The efficient Multix is compact enough to cut through traffic, high enough to cope with floods and potholes, and comes equipped with a power generator for businesses and homes out of reach of reliable supplies. "Know your customer" has never looked so practical.


INDONESIA

BEST SMALL CAP COMPANY

Selamat Sempurna

The winner of this category last year, Selamat Sempurna is again our choice in 2015 after a year in which the vehicle radiator and filter manufacturer continued to impress. Its share price may not have performed, but analysts continue to like its financials.

Its latest full year results show 40% core earnings growth, with currency depreciation and cheaper raw materials helping the story. Neither of those factors are likely to change any time soon.

Founded almost 40 years ago, the company listed in 1996. Sales have risen 70% in the last five years, while return on equity has climbed from 28% to 39%. Its debt to equity ratio has halved in that time, to about 50%, while earnings per share is up from Rp104 to Rp271.

Its growth has been partly driven by a string of joint ventures over the years, and this year it has continued to search for new opportunities, buying Malaysian filter group Bradke Synergies for Rp220bn ($15m). The deal gives Selamat Sempurna a distributor into Malaysia and Australia.

BEST MEDIUM CAP COMPANY

Matahari Department Store

Since its re-IPO in 2013, Matahari Department Store stock has risen more than 50%. The move, which saw shareholders including CVC Partners and GIC sell some $1.3bn of the company, unlocked value and paved the way for an impressive performance.

Analysts like the revamps of its stores and also the renewed effort to get local brands to sell into them. New store openings have also helped — often savvily timed to grab particular opportunities like Ramadhan shopping. The locations have also been well chosen — securing two central Jakarta spots in the face of a general moratorium on new malls in the city indicated that management is able to make a convincing case.

The company has also impressed for its continued focus in spite of the fact that CVC has now sold almost all its stake. Management remains intact.

Perhaps most importantly, the company manages to give people what they want. "Matahari has demonstrated numerous times its ability to deliver strong sales growth even when the sector and the economy are suffering," says one. "Its operating efficiency is renowned, and its understanding of consumers' changing fashion taste has been far more often right than wrong."

BEST LARGE CAP COMPANY

Bank Central Asia

An economic slowdown hasn't led Bank Central Asia to batten down the hatches. On the contrary, the bank has continued to build its network where possible in spite of a falling currency and rising staff costs.

It has done all that while maintaining a prudent approach to lending — some observers wonder if loan growth is too slow, but it's hard to create corporate loan demand out of thin air. What BCA has instead done is try to boost retail demand, cutting lending rates and making its mortgage offering more attractive.

And although its loan growth has lagged competitors (it was 11.5% in the year to December 2014, but could be lower than 9% in 2015, according to analysts), it has the comfort of knowing that asset quality is higher than most. NPLs stand at a paltry 0.6%, and the bank has been provisioning well for years.

All of which adds up to a well-managed position. "Despite the slow 2015 loan growth, BCA's continued capex investment and top-notch asset quality will allow the bank to weather the slowdown and emerge stronger than ever," wrote CIMB analysts earlier this year.

BEST EXECUTIVE

Jahja Setiaatmadja, president director, Bank Central Asia

At the helm of Bank Central Asia since June 2011 but now having worked at the bank for 25 years, President Director Jahja Setiaatmadja has an eye for milestones.

His new 8% mortgage offering launched in February is fixed for 55 months, in honour of the bank's 55th anniversary.

The new product is part of his push to engage the consumer market more in the face of tougher times for corporates, but analysts also credit him with much of the prudent and defensive approach that the bank adopts to lending.

"In tough years you can differentiate — quality stands out," says one analyst. "He is a big part of the decision making process."

Others hail his continued championing of innovative products and service offerings. The bank is regularly praised for its online and branchless banking, as well as its Remittance BCA service.

BCA and Setiaatmadja won Asiamoney's awards last year. They will doubtless be the ones to beat in 12 months' time.


MALAYSIA

BEST SMALL CAP COMPANY

IJM Plantations

Dry weather plays havoc with plantations, and the effect of this year's El Nino weather pattern is no exception. Analysts are already forecasting a tough time ahead.

IJM Plantations is one of the companies that is exposed to the areas most affected by dry conditions in Indonesia and Malaysia, in particular in Kalimantan and Sabah.

But the company remains some analysts' top pick in the sector because of strong fresh fruit bunch (FFB) production growth — a key metric for the industry. First quarter FFB growth was 5.3% year on year and even if that should worsen, analysts are comforted by its healthy balance sheet and "minimal exposure to the volatility of downstream activities".

Part of the reason for the stock's popularity is its excellent reputation for investor relations — a valuable trait in a sector that remains controversial. It has "superb disclosure" and has "great management, with vision and consistency", say analysts. That might not improve the weather, but it certainly puts the company in a strong position in a competitive field.

BEST MEDIUM CAP COMPANY

Genting Plantations

Genting suffers from the same challenges as its smaller cousin IJM. But like IJM, it is better positioned than others because of the quality of its management team.

Analysts say that the company is good at reading market trends, and at implementation of its plans. The company has impressive growth figures — one analyst has a target price earnings ratio of 23 times compared to the sector average of 21 times, attributing the premium to the fact that Genting Plantations has "the strongest organic growth" among its peer group.

Continued low palm oil prices, however, will hurt the sector hard. The best managed will be able to withstand more pain, but even they will have to show their mettle. The next twelve months will be a crucial period for the entire sector.

BEST LARGE CAP COMPANY

Sime Darby

Amid a tough environment for many of Sime Darby's business lines, the company is focusing on strengthening its balance sheet. That is a sensible approach against a backdrop of falling commodity prices and volatile market conditions. Crude palm oil and coal have both been falling.

At the same time, there has also been a focus on continued optimisation of the group, which has divisions spanning plantations, industrial, motors, property and energy. In particular, the last year has seen the integration of recently-acquired New Britain Palm Oil. Smart moves with land disposals have also helped create value.

Amid the tough financial climate — the group missed its own profit and revenue targets in 2015, although it beat some external expectations — analysts praise its management team as "prudent and capable". They also praise its good corporate governance and its resilience in the face of challenges.

BEST EXECUTIVE

Mohd Bakke Salleh, President and Group Chief Executive, Sime Darby

The trained accountant that heads Sime Darby is not a flamboyant figure. Mohd Bakke Salleh prefers low key presentations of facts to flights of fancy. Frank and pragmatic, he focuses on clear communication and realism.

As president director of one of Malaysia's biggest listed companies since 2010, he has had to navigate tricky markets and a complex conglomerate structure.

He was brought into the company at a difficult time. The group's previous CEO had left amid cost difficulties at some energy projects that saw the company post a quarterly loss. Bakke had a challenge on his hands to stabilise the ship quickly.

That he has been well regarded in doing so is a testament to his wealth of experience — among his previous roles were that of CEO of agri-business firm Felda Global Ventures and CEO of LembagaTabung Haji, the Malaysian hajj pilgrims fund.

His pragmatism has been sorely needed in recent times — at the firm's recent full year 2015 results announcement, he freely admitted that the environment was a challenging one and it was impossible to know which way market conditions were headed. In this context, net profits of RM2.4bn compared to RM855m in the year in which he took over should be seen as something of an achievement.


PHILIPPINES

BEST SMALL CAP COMPANY

East West Banking Corporation

Philippine bank liberalisation has been back in the news in recent times, following last year's government decision to open up the sector to foreign ownership. But the first wave of bank liberalisation was back in the 1990s, and EastWest Bank was the first to take advantage, securing a commercial banking licence in 1994.

Since then it has grown fast, and particularly following a rebranding exercise in 2011. It now has more than 400 outlets and has been aggressive in pushing its offering out into rural areas underserved by others.

It is the country's 10th largest bank in terms of assets and its fifth largest credit card issuer. Total operating income grew by 13% in 2014 while expenses grew by 12%, but this looked like an excellent result given the bank's big network expansion and various upgrades to its systems. Analysts also note the fact that the bank was able to generate support for a Ps8bn ($180m) rights issue earlier this year.

Aggressive expansion may take a rest now, however. The bank has already outpaced the 350 branch target it set when it carried out its IPO in 2012. "Now is the time to consolidate, optimise our investments and reap the returns," said CFO Renato de Borja at the when announcing the bank's 2014 results.

BEST MEDIUM CAP COMPANY

Security Bank

Analysts simply love Security Bank, particularly for its ability to hold its own against bigger rivals in the Philippines.

The bank, which is promoted by Megan Young, the Filipino-Chinese winner of Miss World 2013, has picked its areas of focus — and they look eminently sensible. "It has a strong niche in the profitable and still growing Filipino-Chinese middle markets and probably has the best treasury team in town," says one local analyst.

Established in 1951 and listed since 1995, Security Bank is a universal bank that this year also broke into the Bancassurance market, through a partnership with FWD Life. It is the eight largest bank in the country by assets and frequently ranks top in terms of return on equity and asset quality.

Its first half 2015 results were again strong, with a 29% growth in net income and 19% return on equity. Loan growth was 20% while deposits were up 18%. NPLs fell from an already low base, to 0.14%.

The bank has long had a solid corporate and wholesale banking franchise, but it has recently been focusing on building up the profile of its retail offering — hence the presence of Ms Young. Branch network expansion continued this year, most recently with three new branches opened in Mandaluyong, taking the total to 257. The bank says there are more are on the way.

BEST LARGE CAP COMPANY

BDO Unibank

The biggest bank in the Philippines, BDO Unibank continues to lead the way in its sector and play a key role in the country's economy.

From its earliest origins in the 1960s as Acme Savings Bank, through a series of mergers and acquisitions, including the landmark merger of Banco de Oro Universal Bank with Equitable PCI Bank in 2006, BDO Unibank has grown into a juggernaut.

And it is still growing. Pre-tax profits rose 20% in the first half of 2015, to Ps14.65bn.

Its latest potentially transformational deal is the acquisition this year of Mindanao-based lender One Network Bank (ONB). This gave it overnight a 105 branch rural network, and is widely seen as giving BDO a springboard into microfinance — ONB's net interest margin is 7%, a handy boost to BDO's 3.1% in the first half of 2015.

The deal also took BDO's total branch network to 980, the biggest in the country. It might be big, but BDO Unibank certainly knows how to stay nimble.

BEST EXECUTIVE

Nestor Tan, President and CEO, BDO Unibank

Ask analysts to name someone who has redefined their industry in the Philippines, and the chances are that you will soon be talking about Nestor Chan, President and CEO of BDO Unibank.

"Banking in the Philippines used to be a sleepy 9am to 3pm Monday to Friday operation," says one head of research in Manila. "But then he came to town, adapting to the needs of the customer." In some areas people can now bank until 5pm, and in malls until 7pm.

Sep15 BMC3
Not sleepy any more


It's one example of how Tan has shaken up the sector. He has been President and CEO of BDO Unibank since 1998, after 15 years with Mellon Bank as well as stints at Bankers Trust and Barclays.

The bank is now the biggest in the country, but Tan has "kept his feet on the ground", says one analyst. He is a great motivator, leading by example. And he has driven the group to think more innovatively — witness the push into rural banking and microfinance.


SINGAPORE

BEST SMALL CAP COMPANY

Frasers Commercial Trust

A brace of Frasers trusts are our choice of best managed small cap and medium cap companies for Singapore. Frasers Commercial Trust emerged from a white knight operation by Frasers in 2008, when it bought what was previously called Allco Commercial Reit.

Before the global financial crisis, Allco Finance Group of Australia had come to Singapore, bought assets and repackaged them. But it proved challenging to refinance a loan, and the Reit also suffered rating downgrades.

Enter Frasers, which had in any case been planning its own commercial Reit. It snapped up the assets and turned around the performance. The trust's units have traded up about 47% in the last five years, and analysts note that it has consistently been one of the best performers on a total return basis — it has delivered distribution per unit CAGR of 11% since a recapitalisation in 2009.

It also saw a recent solid set of Q2 results this year, with revenue up 22%. It has made its first foray into the central business district of Melbourne, acquiring 357 Collins Street from Australand, which boasts above average occupancy.

And it has unlocked value by making property available to Frasers Centrepoint Limited for a hotel development at China Square Central in Singapore. There's plenty of clever thinking going on in the management of this Reit.

BEST MEDIUM CAP COMPANY

Frasers Centrepoint Trust

The second Frasers trust to feature in our awards is a retail property focused one, listed in 2006. It owns six Singapore malls that are worth about $2.4bn. It also owns a 31% stake in Hektar Reit, listed in Malaysia.

Analysts hail its good execution, and also like the strong and stable earnings outlook, as well as management transparency with the market. Year on year distribution growth every year since the IPO has also drawn praise.

Also in its favour is that it is particularly insensitive to rising interest rates — almost 90% of its debt is fixed rate. That has probably cost it a little in missed savings but is going to look like a very appealing position before too long as US rate rises take their toll on the rest of the world.

Property selection has been top-notch. Its malls are well integrated with transport links and they all tap into a fairly resilient suburban market.

BEST LARGE CAP COMPANY

DBS

Another record six month earnings announcement in July has continued a strong period for DBS and one that has seen it distinguish itself from regional and national rivals in the eyes of analysts.

DBS racked up S$2.39bn ($1.7bn) of net profit in the first half of the year, a new high for the bank. While the performance of rivals UOB and OCBC was "overshadowed by concerns on Asean asset quality", in the words of analysts at Credit Suisse, DBS is expected to continue to outpace the competition.

Its exposure to Asean is less than its rivals and it has more diversified income streams that make it less dependent on interest income. It also stands to gain in an environment of higher US rates.

The bank has made great strides in pushing out from its Singapore heartland, although true geographical diversity remains difficult without a big uptick in business prospects across the Asean region.

But the firm has one of the most complete service offerings in Asia, stretching from cutting edge retail, through trade finance and cash management to capital markets and wealth management. Its steady focus on building without compromising its prudence has taken it to the very top.

BEST EXECUTIVE

Piyush Gupta, chief executive, DBS

DBS chief executive Piyush Gupta, in his post since joining the bank in late 2009, has led the firm to what is now an astonishing 24 consecutive quarters of year-on-year net profit growth.


Sep15 BMC4
Gupta: keeping DBS nimble
Gupta likes to keep the bank nimble, with a management structure that allows quick decision-making. But where he stands out is in his combined approach to the business of banking, which brings together the traditional and innovative in a form that stands the group in good stead to cope with the challenges of servicing a 21st century Asia.


His corporate customer acquisition model in key markets is based around first securing mandates in those business lines that are critical to servicing Asian manufacturers and suppliers, in transaction banking and trade finance.

But this approach is married to an innovation on the digital banking side that is a necessary response to disruptive challengers to traditional banking. The approach reflects Gupta's personal take on the priorities for the industry.

A particular investment push on technology over the last year has seen the bank not only build out more innovation in mobile banking and payments, but also transform branch-based banking. DBS will be in innovative hands while Gupta remains at the wheel.


SOUTH KOREA

BEST SMALL CAP COMPANY

Hanmi Global

Before Hanmi Global was established as a joint venture with US engineering company Parsons, the concept of construction management barely existed in Korea.

It remains the only company dedicated to this area in the country, and with penetration at a tiny 5%, there is plenty of potential.

Construction management companies look after portions or all of a construction project, with the aim of increasing the efficiency of a project's construction timeline or its costs. They also help with imposing consistency and transparency.

Since its days as Hanmi Construction Technology Management in 1996, when it was awarded its supervision licence from the Ministry of Construction and Transportation, it has been involved with projects from top Korean corporates like Samsung, Hynix and Daewoo.

Analysts at Korea Investment & Securities reckon that the company's sales could increase on average 18% per year through 2016.

The firm has a market cap of just under $100m, but is the market leader in the country. It has subsidiaries in China, Vietnam and Dubai and bought US engineering firm Otak in 2011. That expansion drive started in 2003, since when it has worked on more than 230 projects in nearly 50 countries.

Construction management penetration in the US is about 50%. If the Korean market approaches even a fifth of that level, Hanmi will be a force to be reckoned with. 

BEST MEDIUM CAP COMPANY

LG Uplus

LG Uplus, the third largest mobile telecoms operator in Korea and the result of the 2009 amalgamation of three LG telecoms companies, LG Telecom, LG Dacom and LG Powercom, is an energetic player.

Building on the legacy of having been the first in the world to commercialise code division multiple access (CDMA) technology — the basis for all 3G networks — back in 1996, then launching a PCS service in Korea in 1997, it has been relentless in its development.

From innovation in its provision of mobile access to the internet in 2008, which helped to drive take-up of mobile internet services in the country, or the introduction of an internet home telephone service to reduce call charges in 2007.

Top of its current agenda are 5G services and the Internet of Things, where it has most signed MoUs with a host of industry partners, most recently Ericsson.

The stock dipped down into the summer, but has risen more than 30% in three months. Service revenues rose 4.4% in the second quarter while the much smaller handset revenue fell almost 30%. But with costs falling by 8%, operating income almost doubled, to W192bn ($161m).

BEST LARGE CAP COMPANY

LG Display

Back in the late 1990s, when LG LCD first began to ramp up production of thin film transistor LCD displays, the market was mostly limited to laptop computers and monitors for people fed up with giant boxes on their desks.

15 years later, and with Philips out of the picture after having sold its stake in 2008, televisions make up nearly half of LG Display's sales weighting as the technology has moved from the office to the living room and plasma displays have been abandoned for their inefficiency and cost.

The business has continued to transform, with LCD now overshadowed by LED, and increasingly by OLED, organic light emitting diode displays that offer far better quality and can be so thin that they bend. LG Display launched the first 55 inch OLED TV panel in 2013.

LG Display is facing the same challenges as competitors, namely a decline in panel prices as TV manufacturers toy with their inventories. On the flipside, supplying Apple with the displays for iPhones and the Apple Watch makes the pain a little easier for LG Display to bear. On top of that, the company is increasing its sales to other developers.

Pricing pressure has hit stocks, with LG Display falling about 30% over the past 12 months. But some analysts see this as a buying opportunity, particularly those that prefer its execution to Samsung's.

In July the company unveiled a whopping W1tr investment in a new sixth generation flexible OLED display production line, with mass production to start in the first half of 2017. If it people want their screens more often curved than flat, then LG Display will be poised to do well.

BEST EXECUTIVE

Robert Yi, head of investor relations, Samsung Electronics

Almost all the executives that are nominated by market participants to Asiamoney for these awards are in the very highest positions at their respective firms — chairman or chief executive. Myung-Jin "Robert" Yi at Samsung Electronics is an exception.

As head of the company's investor relations department, his is a job that presents formidable challenges. The sector is a tough one to explain, the country's mega-companies are notoriously tricky to navigate and corporate investor relations broadly in Korea does not always have a stellar reputation, and the market dynamics of his industry are frequently unfavourable.

But he impresses on all these counts. "He speaks up for investors," says one analyst. "He's also been the one who has been the most impressive industry dynamics for a slew of products that Samsung is involved in, which is obviously not an easy thing to do."


TAIWAN

BEST SMALL CAP COMPANY

Sercomm Corporation

Broadband networking software and firmware isn't perhaps the grandest business to be in, but it's a pretty important one. It's also one where Sercomm Corporation has established a global reputation since being founded in 1992.

And it is performing well. Sales in the second quarter of 2015 were up 42% compared to the same period in 2014, while pre-tax profit rose 23% (and doubled from Q1). The stock is up 15% in the last 12 months and up 90% in the last two years.

Investors can't praise its management or its investor relations highly enough. "The IR team works really hard on disclosing useful information to investors like us," says one. "I've been working with them for five years now and have really appreciated it."

One analyst says the company is able to weather the industry down-cycle with its product innovation, increasing market share and financial performance.

"It is the best managed small cap company," he concludes.

BEST MEDIUM CAP COMPANY

E.Sun Financial Holding

Comprising a bank, a securities firm, an insurance broker and a venture capital company, E.Sun Financial Holding was established in 2002 on the back of the legacy of the bank, which had existed for 10 years and still accounts for almost of all of the group's business.

It is performing smartly. E.Sun Bank has a prudent policy towards exposure to China, which is lower than most peers. The holding company allows its constituent parts to operate to their best advantage — not demanding heavy upstreaming of dividends from the bank, for example.

At group level, the company's objective is to establish an integrated network of financial services, with a triple growth strategy comprising organic growth, strategic alliances and M&A.

First half net profits in 2015 were 20% up from 2014, to NT$6.67bn ($203m). The bank accounts for just over 90% of that total, with the insurance business the next largest, at 5%.

BEST LARGE CAP COMPANY

CTBC Financial Holding

The holding company that officially began life in 2002 with just 19 staff was this year the clear leader in the Taiwan large cap category for our awards. A huge market response in its favour made any other selection impossible.

Analysts and investors hailed everything from product innovation, consistency of performance, its professionalism, market leadership and its trustworthiness.

One highlighted the quality of its use of technology in its client offering, including its online banking platform, the prevalence of its ATMs in 7-11 stores and its mobile phone app.

The financials have to back up the gizmos, though, and in the case of CTBC they certainly do.

The bulk of its performance is down to CTBC Bank, which was set up as China Securities Investment Corp in 1966, before becoming Chinatrust Commercial Bank and part of the CTBC group in 2002. CTBC Bank accounted for almost three quarters of CTBC Financial Holding's NT$11.5bn pre-tax profit in the first quarter of 2015.

BEST EXECUTIVE

James Chen, CEO, CTBC Bank

James Chen joined CTBC Bank in 1999 from ABN Amro Taipei, holding senior management positions in institutional banking, then rising to be chief executive of the firm.

He is well respected, and is notable for a refreshing lack of hubris about either his business or his firm. He is quite categorical about areas in which opportunities have been missed — speaking to Asiamoney last year he identified the firm's late entry into the Chinese market and also its failure to participate in the government's first attempt at domestic banking consolidation, which had the effect of pushing the bank behind international peers.

These are areas he has worked hard to fix. The bank is the biggest privately owned bank in Taiwan. The development of onshore China business is a priority, but the bank has also been an energetic player in the offshore renminbi market in Taiwan. Another area of strategic focus is Asean.

Chen has spoken of his belief that integrity, a sense of direction and discipline are essential for any professional manager. And he puts ethical behaviour well above profit.

"We must not guide customers to make any decisions against or even harming their benefits for our own benefit," he writes in a document intended for recruits to the bank. "It sounds simple, however, a person's morality is manifested when it's time to make the choice."

Judging by his overwhelming nomination as best executive, he is practising what he preaches.


THAILAND

BEST SMALL CAP COMPANY

LPN Development

Not many companies recast their corporate vision quite as often or as strictly as does LPN Development, a Thai property developer that was founded in 1989. Lumpini Tower, the company's headquarters, was its first project.

Every three years, LPN issues a new statement of its vision. Its current three year plan, for 2014-2016, has targets encompassing growth for shareholders, corporate social and environmental responsibilities, as well as enhancing the quality of life and knowledge of its staff.

Sep15 BMC5
Calmer waters now for LPN


That it can now focus on such things is a testament to how far the company has come. LPN endured some tough times during the Asian economic crisis in 1997-1998, with the floating of the baht and the closure of 56 financial institutions. LPN needed to repay Bt3bn of debt. Cathay Asset Management put together a restructuring and capital increase plan for the company in 1999, through which LPN's entire debt load was refinanced.

Just seven years later, LPN was being recognised as a leading condominium developer. And it still is. "They are pioneers in marketing their product, have a strong brand name and generate very high ROE," says one analyst that admires the firm.

In the first half of 2015, it posted pre-tax profits of Bt1.4bn, up 55% from the previous year. There's nothing blurred about LPN's vision.

BEST MEDIUM CAP COMPANY

Minor International

Minor International doesn't look much like other firms. And it doesn't operate like them either.

By implementing a concept of buying stakes in established operations, or partnering with foreign brands, then often breaking with them and going alone or buying them out, the result has been a group with profits of Bt4.4bn in 2014 and a clutch of varied business lines.

From its origins as a beachfront hotel in Pattaya in 1978 and a pizza restaurant in 1980, the group has worked with dozens of brands, including Swensen's, Dairy Queen and Burger King on the food side, to Marriott and Radisson in hotels and Gap in clothing.

It didn't stop in Thailand. Minor is now in 32 countries, with 120 hotel and club properties, 1,700 restaurants and 290 retail outlets across Africa, Asia, the Middle East, Australia and New Zealand.

Analysts like its reliable execution in the myriad areas the company chooses to go into. Investors like the thorough information they get on what is a complex company. It may be hard to define exactly what it is, but Minor International is nothing short of an extraordinary creation.

BEST LARGE CAP COMPANY

Siam Commercial Bank

It has been a difficult environment for Thailand's banks in recent times, but analysts say that Siam Commercial Bank (SCB) is set to benefit from an approach that has been more prudent than others in the recent past.

That prudence has not always been SCB's hallmark — it has famously had to provision for loans to troubled steelmaker Sahaviriya Steel Industries, and it continues to have to add to its provisions — most recently just as Asiamoney was going to press.

But SCB slammed on the brakes in the first quarter of 2014, cutting costs and loan growth. Analysts think it was right to move when it did, and that it will see the benefits of doing so.

The bank has performed well in its investment banking franchise, particularly in debt capital markets, where it was Asiamoney's choice as Best Domestic Debt House earlier this year. That focus, alongside growth of its M&A business, accompanies what was already a strong retail franchise.

The last year has also seen a change at the top of the bank, with Arthid Nanthawithaya appointed as CEO and deputy chairman and Yol Phokasub as president. They replace previous president Kannikar Chalitaporn.

BEST EXECUTIVE

William Heinecke, chairman and CEO, Minor International

When looking for a company that best reflects the driving force behind it, you don't have to look much further than Minor International, which bears the imprint of Bill Heinecke, its chairman and CEO, all over it. As founder of the sprawling hotels to restaurant to leisure brand company, he is probably the most successful non-Thai-origin entrepreneur in Thailand.

Born in the US in 1949, although moving to Thailand when he was 14 and later giving up his US citizenship in favour of Thai, he is the engine behind Minor and has been at its helm since founding the company in September 1978. As of the end of 2014, he owned just under 17% of its common stock, worth about $580m.

Heinecke showed the enterprising spirit demonstrated by the history and development of Minor International early in his life, selling advertising for the Bangkok World newspaper while still at school, before founding his own cleaning company and an advertising outfit that he subsequently sold to Ogilvy & Mather. 


  • By Asiamoney
  • 23 Sep 2015

Panda Bonds Top Arrangers

Rank Arranger Share % by Volume
1 China Merchants Securities Co 14.82
2 Industrial and Commercial Bank of China (ICBC) 12.96
3 CITIC Securities 9.30
4 Agricultural Bank of China (ABC) 8.10
5 China CITIC Bank Corp 7.20

Bookrunners of Asia-Pac (ex-Japan) ECM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 16,522.26 78 7.51%
2 Morgan Stanley 14,160.31 66 6.43%
3 Citi 14,074.12 91 6.39%
4 UBS 12,552.50 77 5.70%
5 China International Capital Corp Ltd 11,025.08 44 5.01%

Bookrunners of Asia Pacific (ex-Japan) G3 DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 22,776.11 197 7.45%
2 Citi 22,530.75 149 7.37%
3 JPMorgan 14,738.77 90 4.82%
4 Bank of America Merrill Lynch 13,099.48 83 4.28%
5 BNP Paribas 11,893.43 89 3.89%

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