CDL saga has ‘no impact on Hong Leong Asia’, says HLA CEO
The company has been awarded best managed board for companies with a market capitalisation between S$300 million and S$1 billion at the Singapore Corporate Awards
HONG Leong Asia does not see the dispute between CDL’s executive chairman Kwek Leng Beng and his son Sherman Kwek affecting the company despite both groups being part of the same conglomerate.
On Thursday (Feb 27), Hong Leong Asia’s chief executive officer Stephen Ho said: “We do not see an impact in terms of Hong Leong Asia’s business.”
“We have an independent board, we have professionals who are running here,” he added.
He was responding to a question posed by The Business Times at an earnings briefing for the company’s full year financial results for 2024.In attendance were several members of Hong Leong Asia’s management team including group chief financial officer Josephine Lee and Kwek Pei Xuan, executive director, as well as head of sustainability and corporate affairs.
The latter is the daughter of Kwek Leng Peck, Hong Leong Asia’s executive chairman. Kwek Leng Peck is the cousin of Kwek Leng Beng.
With the exception of Kwek Pei Xuan, everyone else in the management team is unrelated to the family, he added.
“We work well as a team, we are in different product lines, like building materials and power train solutions in China, they (referring to CDL) are more into property developments and hotels – very different segments.”
Hong Leong Asia is the trade and industry arm of the Hong Leong Group, one of Asia’s largest conglomerates founded by Kwek Leng Beng’s father, the late Kwek Hong Png, in 1941. The conglomerate also includes CDL, Hong Leong Finance and the privately held Hong Leong Holdings.
Kwek Pei Xuan said: “The corporate governance at Hong Leong Asia is quite separate.”
In 2024, Hong Leong Asia was awarded best managed board for companies with a market capitalisation between S$300 million and S$1 billion at the Singapore Corporate Awards.
The company reported a net profit of S$38.2 million for its second half ended Dec 31, 12.2 per cent higher than the S$34.1 million recorded in the year-ago period.
Revenue stood at S$1.998 billion for the group, which manufactures and sells powertrain solutions and building materials, down 0.4 per cent from S$2 billion the year before.
For the full year, it reported a 35.3 per cent rise in net profit to S$87.8 million, compared with S$64.9 million in the previous financial year.
This is the highest profits have been in the past few years, Ho said.
“If you look at (the) China market, you’re still talking about a market that is slow to recover, especially if we talk about heavy duty and medium duty trucks as a barometer of the Chinese economy,” he said.
He added: “Eventually at some point in time, the (demand) for trucks and buses’ engines should continue to pick up.”
When asked whether the group was concerned about tariffs from the United States on China, Patrick Yau, the company’s head of transformation for its building materials group (Singapore), said exports from China Yuchai, its powertrains solutions unit in China, typically go to the emerging markets and not the United States.
Ho added: “There’s no impact basically (from) tariffs. But.. geopolitical tensions tend to shape commodity pricing (and) raw material prices. It’s got a long-term impact on the market. What we need to do in response to that is to take a proactive view in terms of the hedging of our raw material requirements here.”
Shares of Hong Leong Asia dropped 9.3 per cent or S$0.095 to S$0.925 on Thursday.
