October 8, 2025
Malaysia's Leong Hup International bags award after consecutive record earnings
Leong Hup International Bhd has won its first Edge Billion Ringgit Club (BRC) Award, recognised for recording the highest three-year profit after tax growth in the consumer products and services category.
The win followed a continuous increase in net earnings in one of Malaysa's integrated poultry player. Its net profit hit an all-time high of RM428.93 million (US$101.78 million) in the financial year ended Dec 31, 2024 (FY2024), growing strongly from RM85.4 million (US$20.26 million) in FY2021, RM218.89 million (US$51.96 million) in FY2022 and RM301.74 million (US$71.64 million) in FY2023. That translates into an enviable three-year profit after tax compound annual growth rate (CAGR) of 71.25%.
Earnings continued to be resilient in 1HFY2025, with net profit up 25.5% year on year to RM192.1 million (US$45.63 million), although revenue declined 8.9% to RM4.34 billion (US$1.03 billion) due to lower selling prices in Indonesia.
After being taken private by the founding Lau family in April 2012, Leong Hup returned to the local bourse in May 2019 at a listing price of RM1.10 (US$0.26)per share. The Lau family, through Emerging Glory Sdn Bhd, controls 54.05% of the company.
The stock was on a downward trend soon after its listing, before recovering some lost ground in recent years as its adjusted share price climbed from 46.4 sen as at end-March 2022 to 63.5 sen as at end-March 2025, representing a three-year shareholders return CAGR of 11.02%. Closing at 60.5 sen on Aug 29, 2025, the stock had a market value of RM2.16 billion.
Leong Hup's operations span Malaysia, Indonesia, Vietnam, Singapore and the Philippines, being involved in the entire supply chain, from livestock feed production and poultry breeding to broiler and layer farming, further processed poultry and quick-service restaurants. As at end-FY2024, its annual production capacity stood at 4.41 million tonnes, with 2.65 million tonnes of feed sales volume.
The group has five feed mills each in Malaysia, Indonesia and Vietnam, with one in the Philippines, where broiler chickens are produced and distributed for consumption in these markets. It also exports broiler chickens from Malaysia to Singapore.
Meanwhile, the table egg production is operated by Leong Hup's 55%-owned Teo Seng ), which recently bagged the highest growth in profit after tax over three years in the consumer products & services category at The Edge Malaysia Centurion Club Corporate Awards 2025, which celebrates the achievements of companies with a market value below RM1 billion (US$237.30 million). Members of The Edge BRC have a market capitalisation of at least RM1 billion.
As part of the group's strategy of downward integration, Leong Hup runs a chain of quick service restaurants such as Baker's Cottage in Malaysia, LH Deli in the Philippines and Sunny Chick in Indonesia, serving ready-to-eat poultry products.
- The Edge Malaysia
In 1HFY2025, Indonesia was the largest revenue contributor at 37.3%, followed by Malaysia (26.5%) and Vietnam (18.2%).
Corn and soybean meal are the key feed ingredients for Leong Hup, which expects its margins to remain relatively stable with the current outlook on feed input costs. Its profit before tax margin expanded to 8.17% in FY2024 from 5.82% in FY2023, 3.61% in FY2022 and 1.96% in FY2021.
"In the light of the heightened uncertainty arising from the tariff announcements by the US, the group will continue to be prudent in managing its resources to deliver sustainable growth. The group remains cautiously optimistic as opportunity for growth in chicken and egg consumption per capita remains high in the countries where we operate in," Leong Hup said when releasing its latest quarterly financial results.
Leong Hup has set a target payout ratio of 30% of profit after tax and minority interests (Patami) in each financial year on a consolidated basis after considering reinvestment opportunities for further business expansion. In FY2024, it paid a total dividend of 2.75 sen per share, against three sen in FY2023.
RHB Research reckons that Leong Hup's earnings and margins should normalise from the exceptional FY2024 base, which was aided by the sharp depreciation of the US dollar and low effective tax rate.
"This is considering the lower tax credits moving forward, on top of the cyclical and volatile nature of the poultry industry, particularly in Indonesia. That said, we believe the overall fundamentals of the poultry industry have improved, with the pandemic and commodity supercycles phasing out the smaller and weaker players. This has led to an industry consolidation, which is favourable for large industry players like Leong Hup," the research outfit said in an Aug 27 note, maintaining its "buy" call with a target price of 98 sen.
Given the above mentioned and sturdier balance sheet (net gearing fell to 0.43 times in 2Q2025 from 1.1 times in FY2022), RHB highlighted that Leong Hup is well positioned to capture more market share and improve on its efficiency level via capacity expansion.
