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Leeden Delivering Consistent Growth Through Excellent Leadership
Corporate Digest | 29 July 2011
By: Xavier Lim
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By: Jade Lee
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Steven Tham, Chairman and CEO of Leeden, has recently been awarded the prestigious outstanding entrepreneur award 2011 by Enterprise Asia. Remarkably, this was also the second time he bagged the same award.

For the uninitiated, the Asia Pacific Entrepreneurship Award (APEA) is a world class award recognizing and honoring business leaders who have shown stupendous performance and persistence in developing successful business within the region. Notably, of 300 nominations received for the APEA, out of which approximately 24 emerged as winners in the Outstanding Entrepreneur Award category.

Commenting on the win, Tham humbly attributed the excellent award to his company’s unique business strategy as well as the team. “I would like to extend my sincere appreciation to my team of hard-working staff who have done a marvellous job in building up a strong “Leeden” brand equity,” said Tham during an exclusive interview with Shares Investment (Singapore).

Competitive Edge In South East Asian Market
When Tham came on board in July 2000, he restructured the firm and successfully transformed Leeden from a multiple business lines organization into an Integration Specialist for Welding, Gas and Safety.

Tham, with the firm support from his management and staff, has established a strong foothold for Leeden in Singapore. Over the years, Leeden has also been expanding robustly, increasing regional market presence in Malaysia, Indonesia, China, Vietnam, Thailand, Philippines and Australia. These expansion efforts have also enabled Leeden to clinch the 5th placing within the prestigious Top 10 “Fastest Growing Internationalising Companies” in 2010.

While Leeden is placed among the top 10 fastest growing internationalising companies, Tham stressed the firm’s gross profit margin in overseas market may be affected by its effort in growing market share, competing with local companies. That said, Tham reaffirmed his positive outlook for Oil & Gas (O&G) sector. “Growth in the offshore and marine activities is encouraging, largely driven by investments in Asia Pacific region,” acknowledged Tham. Furthermore, GL Noble Denton, a world class technical service provider for the O&G industry, has noted that Asia currently offers some of the strongest prospects for the oil and gas sector particularly in the upstream sector.

Tham is also confident that the firm has the right business strategy in place to drive further growth in the region. “We are not just distributors, we value-add our service offerings by providing a one stop package deal that caters to all our customers’ needs,” added Tham. Significantly, Leeden’s geographical expansion efforts have paid off with revenue growth from Malaysia exceeding that of Singapore in 2010.

To further strengthen its competitive edge in the region, Leeden has also recently set up a branch in Johor to be in a closer proximity to its valued customers. Strategically located at the junction within the Johor Pasir Gudang/Masai area, the branch opening marks a significant milestone for Leeden’s aggressive expansion in the Johor region.

Right Person, Strategic Plan, Strong Fundamentals
Indeed, Tham’s foresight and restructuring efforts have indisputably made a massive contribution to Leeden. From FY06-FY10, Leeden’s turnover and net profit grew at a compounded annual growth rate (CAGR) of 22.1% and 41.7% respectively.

Leeden’s FY10 net cash provided by operating activities jumped 33% to $16.7 million while cash and cash equivalents remain strong at $21.5 million as at 31 Dec-10. Notably, the firm has been able to maintain its dividend payout with an increasing trend from 11.1% in FY07 to 34.3% in FY10.

At the time of writing, Leeden is trading at $0.425, or a 1.6% discount to its net asset value of $0.432. More importantly, the company paid a FY10 dividend of $0.015, translating into a reasonable yield of 3.5%. It is also trading at an undemanding P/E of 9.8 times. Judging from its strong fundamentals as well as the confidence of management in Leeden, this could potentially generate a good return for its investors well over the years.

Source: Leeden’s FY10 report

This is a co-written article of Shares Investment, which lays out the analytical ideas and thoughts of the authors, who are well versed in investments and market concepts.

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