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SBC Corp Bhd, despite its diminutive size and profitability, has attracted a number of recogniseable and prominent names as minority shareholders.
The Edge reports that Morisem Consolidated Sdn Bhd, which is a wholly-owned subsidiary of Tan Sri Lee Shin Cheng's IOI Corp Bhd, has emerged as a substantial shareholder on Aug 27, with a 5% stake, or 11.74 million shares.
Bursa Malaysia filings show that the investment holding company Morisem, bought 49,000 shares on the open market on June 12.
Morisem currently holds second place in their shareholding in SBC Corp. The Sia family owns at least 32%.
The group is helmed by managing director and CEO Datuk Sia Teong Heng, and his brother, executive director Sia Teong Leng.
SBC Corp's latest annual report, cited by the publication, in it's list of top 30 shareholders, states that Datuk Seri Tan Han Chuan and Datin Tan Ching Ching hold a 4.35% and 3.69% stake, respectively.
Both Han Chuan and Ching Ching, board members of JKG Land Bhd and Jasa Kita Bhd are the children of elusive tycoon Tan Sri Robert Tan Hua Choon, who is known as the "Casio King".
Other notable names in the shareholders list is Peter Yu Kok Ann, president of the Raintree Club of Kuala Lumpur and managing director of Golden Donuts Sdn Bhd who is master franchisee of Dunkin' Donuts in Malaysia. He holds a 0.85% stake in SBC Corp.
Only son of Datuk Habib Mohamed Abdul Latif (founder of Habib Jewels), Datuk Meer Sadik, owns a 0.54% stake in SBC Corp.
With a market capitalisation of just RM116 million, based on its closing price of 49.5 sen last Thursday, what do these individuals see in SBC Corp?
Its net profit has slumped from RM33.3 million in the financial year ended MArch 31, 2014(FY2014) to RM17.7 million in FY2015. It declined to RM13.4 million in FY2016.
In FY2017, it slipped into the red, with a net loss of RM3.04 million as revenue more than halved to RM64.6 million from RM139.5 million a year ago.
SBC Corp turned around in FY2018, registering a net profit of RM2.1 million on revenue of RM52 million. The overall weak financial performance had been mostly reflective of the gap between commencement of projects and the completion of earlier ones.
The contacted by publication, IOI Corp explained that Morisem is its investment vehicle that undertakes non-core investments in listed companies' shares, utilising the group's surplus funds.
"The acquisition of shares in SBC Corp was first made in 2014, around the time when IOI Properties Group Bhd was demerged from IOI Corp," it said via email exchange with the publication.
IOI Corp's policy is to keep non-core investment in shares below the substantial shareholding threshold of 5%, but it does not say why it invested in SBC Corp.
SBC Corp was founded in 1954, and is a property and construction firm. It's jewel in the crown is the Jesselton Quay project in Tanjung Lipat, Kota Kinabalu, a joint venture with locally listed Suria Capital Holdings Bhd.
Suria Capital, which own the 16.25-acre tract where the Jesselton Quay will be developed is not directly involved in its development. However, it will be entitled to 18% of the gross development value (GDV) of RM1.8 billion.
Jesselton Quay is the only integrated seafront project in Sabah.
"If we look at SBC Corp's market cap of RM116 million against Jesselton Quay's GDV of RM1.8 billion, the ratio is more than 15 times," said a property analyst who follows the group in his personal capacity.
Jesselton Quay has faced longer than expected delays in obtaining approvals from authorities. In September of 2016, the subdivision of the master land title was completed, allowing SBC Corp to open sales of the 10-year mega project.
Foundation works has been completed and tower structure works are well underway.
JQ Central, its main commercial section will consist of an office tower, two blocks of commercial condominium towers, showroom galleries, shops, and a commercial recreation club at the podium rooftop.
The publication quotes the analyst, who said: "I believe this project will be self-sustaining. Earnings are expected to pick up slowly in FY2019."
In its annual report, SBC Corp says: "The project is expected to generate good prospects and activity for the group, and will feature strongly in the coming years, given its international quality offerings as a tourism destination, prominence on the waterfront, and growing direct air links to nearly all major countries, especially China and East Asia."
