19. TAN SRI SYED MOKHTAR ALBUKHARY Flagship: MMC Corp Bhd Net Worth: RM3.15bil

YET another tycoon to see a dip in his fortunes is Syed Mokhtar, known for having his hands in many businesses. These range from logistics to utilities to engineering and construction. Syed Mokhtar’s net worth stood at RM5.25bil in 2017. Notably, 2017 was also the year in which the reclusive tycoon dropped out of the top-10 richest list, even as his net worth strengthened by nearly 7% year-on-year.

Though his flagship MMC, Syed Mokhtar has a vast exposure to ports, logistics, construction and engineering. He also controls DRB-Hicom Bhd, which made headlines in 2017 when it sold a 49.9% stake in Malaysian car-maker Proton to Chinese auto group Zhejiang Geely.

Through MMC, Syed Mokhtar also has significant stakes in power producer Malakoff, energy firm Gas Malaysia and Pos Malaysia.

Touted as the most successful Bumiputera entrepreneur, considering his vast business empire, Syed Mokhtar faces challenges as most of his businesses are affected by the general business slowdown.

Generally, shares of Syed Mokhtar’s infrastructure-linked firms fell amidst an ongoing review of Malaysia’s mega-infrastructure projects.

The group’s main construction business is run through the MMC-Gamuda joint venture. However, all is not lost as late last year, the Ministry of Finance said that MMC-Gamuda would continue the Mass Rail Transit Sungai Buloh-Serdang-Putrajaya Line (MRT2) project with cost reductions for the underground works.

The decision was made after the final round negotiations which resulted in MMC-Gamuda agreeing to increase the cost reductions of the underground works to RM3.6bil from RM2.13bil.

Notably also, MMC posted full year FY2018 profits which exceeded consensus estimates. Its construction revenue surged 56% due to higher work progress for the Klang Valley MRT Sungai Buloh-Serdang-Putrajaya (KVMRT-SSP) Line.

RHB Research which has a buy call on the stock, expects a better FY2019, with earnings visibility for its construction division secured for the next three years, while a full year contribution from Penang Port, acquired in May 2018, will boost the ports and logistics division.

The research house also reckons MMC to be an undervalued stock with strong earnings growth. For example, it pointed out that MMC’s ownership in Malakoff and Gas Malaysia combined is already worth RM2.84bil or 85 sen per MMC share. Combined with Senai Airport’s value – estimated at RM836mil or 27 sen per MMC share – these three assets are already worth RM1.12 per share. Hence it notes that effectively, the current market price of RM1.05 is pricing zero value for all other MMC assets, with the most obvious mispricing is for MMC’s ports operations, which have been generating steady earnings historically. Meanwhile for Proton, Geely was selected as DRBHicom’s strategic partner following an intensive vetting process which included 23 global automotive players. Geely now says that it has raised its 10-year projection for the sale of Proton cars by over 100% to one million units.