This article first appeared in The Edge Malaysia Weekly on December 4, 2023 - December 10, 2023

ON the first floor of a shoplot in Kuchai Lama, among hotpot restaurants and bubble tea houses, is the office of developer and concessionaire Menang Corp (M) Bhd — a company with a long history, having been incorporated in 1964 and listed a few years later.

The company previously had its office in Kuala Lumpur City Centre (KLCC), with the Petronas Twin Towers in sight. On the shift to a less salubrious part of town, executive chairman Toh May Fook says nonchalantly, “Rent there (around KLCC) was RM60,000 a month.”

Rent in Kuchai Lama is likely to be substantially lower.

But that is how Toh, an accountant by training, operates. At 65, he is now a seasoned corporate player, having worked as an auditor, and then at Roxy Electric Bhd, the vehicle of the late Tun H S Lee and his son, the late Tan Sri Alex Lee.

Later, Toh shifted to Indonesian pharmaceutical giant, the Kalbe group. He was also once a company secretary at Menang many decades ago but came back as a substantial shareholder in November 2015 and was appointed managing director. However, he left in November 2016, after blowing the whistle on corporate governance issues which, in turn, resulted in an altercation with other members of the management and substantial shareholders.

Now at the helm of Menang, Toh says, “I have been in taxation, consultancy, the secretarial side. In my time, many interesting things have happened in Malaysia. In the 1980s, there was the recession; then, there were so many insolvency cases, the cooperative crisis. I was involved in the restructuring of Sin Chew (Media Corp Bhd); it was taken over by (Tan Sri Tiong Hiew King’s) Rimbunan Hijau during my time; Landmarks Bhd’s restructuring with Tan Sri Chong Kok Lim. So, I was an observer at so many interesting big things.

“I jumped around. I was in Menang for only a year as company secretary, then I jumped to Indonesia, where I was with an amazing group, the Kalbe group,” Toh tells The Edge.

Now, with all the experience garnered over the years, Toh, who owns 12.79% of Menang, is trying to steer it to a better place.

At the outset of the exclusive interview, he says, “I have to apologise, in my mind there are so many elements. I’m also talking to several parties, so my thoughts are on how to bring them together, who to bring into play with us, so it’s very interesting … I’m busy mapping things out.”

Menang, Toh hopes, will be a very different animal once he executes his plans but the company’s two core businesses — concessions for the construction and maintenance of universities and a training centre under the Universiti Teknologi Mara banner via private finance initiatives (PFIs), and property development — are likely to be maintained.

Menang has under its belt the concession for the maintenance and leasing of UiTM Cawangan Negeri Sembilan, Kampus Seremban, which expires in January 2034, the concession for UiTM Cawangan Selangor, Kampus Puncak Alam, which concludes in September 2035 and the concession for the training facility, Institute of Leadership & Development of UiTM, which ends in July 2036.

With the building blocks seemingly in place, Toh is looking at how to improve things at Menang, having taken over as executive chairman in July this year.

Menang had started out manufacturing jute for gunny sacks used in tin mines and rubber estates. It went into property development in the 1980s when it was run by John Chia Sin Tet and his brother Francis Chia Mong Tet who went on to Unisem (M) Bhd. It developed the Rasah Jaya township in Seremban in the early 1980s.

Now, the company has about 740 acres, all largely unencumbered — 458.47 acres in Seremban 3 and Rasah Jaya, in Negeri Sembilan; 126.74 acres in Klang, Selangor; 73.86 acres in Rantau, Negeri Sembilan; 67 acres in Ulu Bernam, Selangor, and 11.14 acres in Port Dickson, Negeri Sembilan.

A look at Menang’s annual report shows that all its land was acquired in the late 1990s or early 2000s and has not been revalued. From Menang’s financial results for its first quarter ended Sept 30, 2023, the company has total assets of RM992.35 million.

At the present time, with its property development business more or less dormant, the concession business has been its key revenue generator.

For its three months ended Sept 30, 2023 (1QFY2024), Menang posted a net profit of RM5.21 million on revenue of RM20.9 million. In the previous corresponding period, the company made a net profit of RM3.41 million on sales of RM21.61 million.

In 1QFY2024, Menang’s net cash from operating activities amounted to RM26.63 million while its finance costs stood at RM6.14 million.

As at end-September this year, Menang had deposits, cash and bank balances of RM69.79 million and on the other side of the balance sheet, it had long and short-term debt commitments of RM257.68 million and RM87.54 million, respectively.

As at end-September, its net gearing improved to 0.55 times.

Toh says Menang has paid off RM40 million of loans that had high interest rates, and with a debt linked to a concession likely to be settled in 2026, Menang’s earnings could get a shot in the arm.

“After paying off the debt, the remaining concession period will be clean cash flow for the company,” he adds.

It is noteworthy that Menang’s 206.25 million warrants, which have a strike price of 50 sen, are expiring in mid-December next year, which could bring in an additional RM103.12 million for the company if fully converted.

The fresh funds should come in handy with Menang and Toh looking to develop a project on the land in Seremban 3 that will include senior living elements. Some of the plots in Seremban are choice parcels, scenic with lakefront views and 40-year-old Pulai trees.

Toh says a ballpark figure of RM20 million will be required to kick-start the senior living plan.

“A lot of thought has gone into this … We are coming up with a master plan. Many big players also talking to us to jointly develop the land. We are in the midst of gathering ideas, those who know our land want to do joint ventures with us, individuals who have successfully built interesting townships (all want to partner us).”

On when these plans are likely to bear fruit, Toh says, “I think, development is a function of population, so you cannot just build, there must be some correlation with population growth — you have ask, what does society need? If you can solve a society’s pain point, for instance, senior living … We have had many brainstorming sessions on how to recreate a kampung environment for ageing people, which, in a way, will force them to interact,” he says, adding, “Building a community is my dream.”

Whether or not Toh’s dream becomes a reality, Menang has three concessions churning out recurring income and more such contracts could be in the pipeline.

The company is in talks to secure more concessions from the government, although these new business ventures are unlikely to be related to university campus construction and maintenance.

“We have been invited by UKAS (Unit Kerjasama Awam Swasta or the Public Private Partnership Unit, which is under the Prime Minister’s Department). For those who have successfully executed concessions, there are always dialogues, engagements, so we have been invited to give suggestions. If there is anything we feel we can do to help develop the country, they welcome us to give proposals.

“There are several areas that we think may require private finance initiatives. We are thinking of enforcement, for example, you have problems with traffic lights. It’s quite a nuisance when they do not function, so it’s as simple as traffic enforcement, or even parking, indiscriminate parking, if you have certain technology, you can enforce easily, all IT-related. It’s not rocket science, it has already been applied in many countries. In today’s world, a lot of things have already been done at very reasonable costs,” Toh explains.

He adds that the new concessions are likely to be undertaken as joint ventures.

“We are a public-listed company, so the capability of us raising money and getting a reasonable return is there … that is the important part. There are people who know how to do it but the access to the decision-maker and the capital is what is needed. To me, capital is something we can handle, to me technology is not rocket science,” he says.

On rewarding shareholders who have held on to their shares in Menang all these years, Toh says the company may be in a position to make a dividend payout but as a developer, it needs funding. Furthermore, will it be able to sustain the dividend payout?

Shareholders who did not cash out when Menang hit RM1.12 per share in May this year — close to triple the counter’s year low of 43 sen — would certainly hope the plans mooted by Toh materialise.

At its close of 71 sen last Friday, Menang had a market capitalisation of RM364.66 million. 

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.