Celebrating Bursa's stellar performers

Celebrating Bursa's stellar performers

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Celebrating Bursa's stellar performers

Celebrating Bursa's stellar performers or the second year running, Focus Malaysia organised and hostedits Best Under Billion Awards (BUBA) ceremony. These awards were created to recognise excellence among the often overlooked small to mid-capitalised companies listed on Bursa Malaysia.

It is said that when the going gets tough, the tough get going; and the 10 companies that were honoured at the awards proved this adage to be true. In a difficult economic environment which has dragged down the financial performances of companies big and small, our winners succeeded in delivering value to shareholders through a combinationof hard work, sustainable planning and strong management.

Top performers are recognised across eight award categories, with two winners in each one.There are two groups, one for companies with a market capitalisation of between RM150 mil and RM499 mil and for those which fall between RM500 mil and RM950 mil.

Financial efficiency and prudent management
As financial performances are the most obvious measure of a company's health, awards are given to those which recorded strong revenue, good profits and showed enterprise value growth in their most recent full year financial results.

The Awards also took note of those which showed financial efficiency and prudent management of company resources, by rewarding those with healthy returns on assets and good cash flows.

Given that they are listed entities, the companies were also evaluated on how much value they provided to their shareholders. This was measured based on dividend yield.

To emphasise the importance of transparency and sustainability, particularly among listed entities and to highlight the need for accountability to shareholders, the Awards also recognised those which practised high levels of sustainability reporting.

The winning company provided disclosures which went above and beyond what was mandated by Bursa Malaysia's minimum requirements to provide stakeholders with a holistic and comprehensive information.

For example, winners in the Transparency category published detailed directors' remuneration numbers and minutes of their AGMs. They also had detailed and effective whistleblower policies aimed at maintaining corporate integrity.

This year also saw the introduction of the Best Sustainability Reporting award, in line with the growing importance for companies to establish and run businesses that take into account the effect they have on the surrounding economy, environment and society in the areas where they operate.

The vision and leadership of one corporate leader in founding and developing his company into a successful business was also recognised with the Best CEO award. The recipient of the award was selected by a panel of Focus Malaysia's editors, for his dynamism, leadership and strong business and management acumen.

This year's winners were selected from the more than 400 listed companies that have a market capitalisation of between RM150 mil and RM950 mil. The companies were put through a stringent qualification and selection process based on a specific set of criteria for each category.

Focus Malaysia worked in partnership with KPMG Management & Risk Consulting to ensure the integrity and high standards of the judging process.

The majority of this year's winners come from the Consumer stocks, followed closely by those in the Industrial Products sector. This was followed by companies in the Trading and Services area, and those from the Real Estate Investment Trust sector.

While the under billion tag might seem to make the companies small, they are in fact a force to be reckoned with on Bursa Malaysia. Out of 929 listed companies, 759 or 81.7% fall below the RM1 bil range.
 

Methodology and criteria

The winners were selected using specific methodologies for each of the eight categories. KPMG Management & Risk Consulting worked with Focus Malaysia to filter the winners, and the final decision was validated in consultation with the firm.

CATEGORIES AND CRITERIA

BEST RETURN ON ASSETS
RETURN on assets (ROA) tells us how efficient a company is in utilising its assets. We calculated the ROA for companies listed below RM1 bil for FY15. The company with the highest ROA was named the winner.
BEST REVENUE GROWTH
WE compiled the revenue for the past three years and then calculated the compound annual growth rate (CAGR). A company has to show consistent revenue growth, excluding any extraordinary gains. The company with the highest three-year revenue CAGR is the winner.
BEST PROFIT GROWTH
WE compiled the net profit for the past three years and then calculated the CAGR. A company had to show consistent profit growth, excluding any extraordinary gains and growth. The company with the highest three-year profit CAGR is the winner.
BEST CASH FLOW FROM OPERATIONS
WE compiled the cash flow from operations over the past three years and calculated the CAGR. The company with the highest three-year cash flow from operations is the winner.
BEST ENTERPRISE VALUE GROWTH
WE looked at the enterprise value (EV) growth rate over two years for all the companies under consideration. The company with the highest year-on-year EV growth is the winner.
BEST IN DEVIDEND YIELD
WE selected the company with the highest dividend yield for FY15
BEST IN TRANSPARENCY

WE put a weighted score on six factors to determine how transparent a company is in its disclosure to shareholders.These included:

  • Transparency pledge, time taken to file annual financial results, precise remuneration of directors, AGM minutes,video recording or podcast, dividend policy statement, and whistle-blower policy.
  • The company with the highest weighted score is the winner.
BEST SUSTAINABILITY REPORTING

WE put a weighted score on three main areas which were broken down into sub-sections to determine how comprehensive the company's sustainability reporting was. These included:

  • Completeness and Credibility (30%)
    A good report needs to be thorough and provide stakeholders with a complete view of the company's operations linking it to its business goals
  • Action on the ground (50%)
    This measures how much what is being reported has in fact been materialised into action on the ground. Sustainability reporting must be more than just intent and must reflect action taken to achieve the goals.
  • Communication (20%)
    How well the report communicates its intentions and results to its declared target audience. The company with the highest weighted score is the winner.
BEST CEO (EDITORS' PICK)
THE editors' choice of Best CEO was based on factors such as leadership skills, dynamism and business acumen. On abroader note, the editors analysed how CEOs steered their companies to greater heights before picking the winner.
OVERALL WINNER
THE Best Under Billion Awards categories were divided into financial performance, efficiency and transparency, with a 30:30:40 weightage given to each of the categories respectively,the Overall Winner had the highest scores in all three areas.

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