Press Metal among Top 50 fam­ily-owned firms glob­ally

Re­port: It has mar­ket cap­i­tal­i­sa­tion of above US$2bil since 2014

The Star Malaysia - StarBiz - - News -

KUALA LUMPUR: Malaysia ranks sev­enth glob­ally in terms of the num­ber of fam­ily-owned busi­nesses and 11th in Asia-Pa­cific ex-Ja­pan in terms of av­er­age mar­ket cap­i­tal­i­sa­tion at US$3.8bil, ac­cord­ing to Credit Suisse Re­search In­sti­tute (CSRI).

“Malaysia’s Press Metal is among the Top 50 fam­ily-owned com­pa­nies glob­ally with a mar­ket cap­i­tal­i­sa­tion of above US$2bil in terms of av­er­age rev­enue growth since 2014,” CSRI said in a re­port.

Press Metal is ranked 32nd un­der the Top 50 com­pa­nies by rev­enue growth and 44th un­der the Top 50 com­pa­nies by share-price re­turns.

The CSRI re­leased its third edi­tion of the “The CS Fam­ily 1000” re­port on fam­ily-owned com­pa­nies glob­ally.

The re­port re­viewed the in­vest­ment case for fam­ily-owned com­pa­nies and re­vealed that they have out­per­formed broader eq­uity mar­kets in ev­ery re­gion and sec­tor by an av­er­age of 3.9% per year since 2006.

Asia-Pa­cific ex-Ja­pan fam­ily busi­nesses have also out­per­formed non-fam­ily-owned com­pa­nies at an an­nual av­er­age of 3.1% across all sec­tors.

In ad­di­tion, CSRI said that the fi­nan­cial per­for­mance of fam­ily-owned com­pa­nies was also su­pe­rior to non-fam­ily-owned peers.

Fur­ther­more, the re­port said that fam­ily busi­nesses ap­peared to fo­cus more on longterm growth and their share price re­turns have been stronger than their peers.

In a state­ment, Credit Suisse head an­a­lyst of the­matic in­vest­ments Eu­gene Klerk said: “Fam­ily-owned busi­nesses are out­per­form­ing their peers in ev­ery re­gion, ev­ery sec­tor, what­ever their size.

“Our re­search seems to sug­gest that in­vestors are not too con­cerned about the level of own­er­ship but rather how in­volved the fam­ily own­ers are in the daily run­ning of the busi­ness.

“This seems to be at the core of the suc­cess of fam­ily-owned com­pa­nies in our view,” said Klerk, who is also the re­port’s lead au­thor.

The ma­jor­ity of com­pa­nies in­cluded in the data­base are in the emerg­ing mar­kets, with Asia-Pa­cific ex-Ja­pan alone con­tribut­ing 536 or 56% of the to­tal and 38% of to­tal mar­ket cap­i­tal­i­sa­tion.

The Asian uni­verse con­sists of com­pa­nies rang­ing from US$200mil to US$463bil in mar­ket cap­i­tal­i­sa­tion.

China tops the charts with the high­est rep­re­sen­ta­tion (167), fol­lowed by the United States (121) and In­dia (108).

Among the Top 25 coun­tries with the largest num­ber of fam­ily-owned busi­nesses, 11 are in Asia in­clud­ing Malaysia (sev­enth), Thai­land (eighth), In­done­sia (ninth), Philip­pines (11th), Sin­ga­pore (17th).

Among the Top 25 coun­tries glob­ally in terms of av­er­age mar­ket cap­i­tal­i­sa­tion of fam­ily-owned busi­nesses, seven are in Asia in­clud­ing Sin­ga­pore (16th) and the Philip­pines (25th).

Within Asia-Pa­cific ex-Ja­pan, in terms of av­er­age mar­ket cap­i­tal­i­sa­tion, Sin­ga­pore fam­ily busi­nesses come third at US$7.5bil fol­low­ing South Korea and Hong Kong. The Philip­pines is sixth at US$5.6bil, Thai­land sev­enth at US$5.2bil, In­done­sia eighth at US$5bil and Malaysia at US$3.8bil.

The re­port also re­vealed that the fi­nan­cial per­for­mance of fam­ily-owned com­pa­nies is su­pe­rior to that of non-fam­ily-owned busi­nesses. Rev­enue and Ebitda growth is stronger, Ebitda mar­gins are higher, cash flow re­turns are bet­ter and the mo­men­tum in gear­ing is more moder­ate.

The re­port found that fam­ily-owned com­pa­nies in Asia-Pa­cific ex-Ja­pan have traded at a pre­mium rel­a­tive to non-fam­ily-owned com­pa­nies since 2006, record­ing a 10-year av­er­age of 8%.

It said an ex­cep­tion to this was dur­ing the fi­nan­cial cri­sis of 2008, when fam­ily-owned com­pa­nies in Asia-Pa­cific ex-Ja­pan traded at a dis­count of -7% rel­a­tive to non-fam­ily-owned com­pa­nies.

“At a coun­try level, Chi­nese, In­dian and In­done­sian fam­ily-owned com­pa­nies ap­pear to be the most ex­pen­sive, trad­ing at high ab­so­lute mul­ti­ples, with a 12-month me­dian price-earn­ings ra­tio (P/E) of be­tween 15 and 16 times, com­pared with around 10 to 13 times P/E mul­ti­ples of com­pa­nies in South Korea, Hong Kong and Sin­ga­pore,” it said.

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