About Us

In the financial year under review, the global economic landscape was softer on the back of persistent headwinds and uneven growth across major economies, led by the resilient economy of the United States (“US”) and emerging markets in Asia. Global inflation remains a key theme throughout the year despite trending lower, but remains elevated as compared to pre-pandemic levels, complicating monetary policy normalisation efforts. Additionally, the year in review also saw heightened geopolitical concerns with the emergence of new conflicts and tensions in the Middle East in addition to the ongoing Russia-Ukraine war.

On the local front, the Malaysian economy registered higher economic activity in financial year ended 2024 (“FY2024”), driven by a recovery in exports and resilient domestic consumption. Steady employment and wage growth augmented by increased foreign direct investment and tourism sector recovery remains supportive of Malaysia’s economic expansion.

In the local Debt Capital Markets space, total gross corporate issuances were reduced by RM33.7 billion year-on-year (“y-o-y”) to RM116.8 billion in FY2024 amid the uncertainty in the interest rate outlook and the lack of new infrastructure projects during the financial year. The bulk of the gross issuances continued to be from financial institutions’ capital instruments and Government-Linked Companies entities (including Cagamas Berhad). The Malaysian capital market witnessed the emergence of an alternative business financing channel via a debt fund raising platform offered by BR Capital Sdn Bhd (a joint venture entity between Bursa Malaysia and RAM Holdings) targeted at public listed and unlisted small to mid-sized companies to issue credit-rated investment notes with the aim to lower issuance costs, reduce reliance on only banking facilities, and widen access to capital markets, reinforcing regulators’ commitment to meet the evolving needs of the market.

The Malaysian stock market performed better, with the FTSE Bursa Malaysia KLCI (“FBMKLCI”) ending higher at 1,590 points on 30 June 2024, a 16% increase from the start of the financial year. The gains were underpinned by the laggard local bourse playing “catch-up” to its regional peers, alongside the emergence of key investment themes such as tourism recovery, clean energy transition, Johor’s development reinvigoration and certain sectors benefitting from the ongoing US-China trade tension. Local institutions played an important role in the FBMKLCI’s strong performance, being the key net buyers in FY2024, by responding to the government’s call to invest more in the domestic market. Overall, I am pleased with Hong Leong Capital Berhad’s (“HLCB” or “the Group”) robust performance this financial year under a challenging operating environment and I am confident that our solid foundation and strategic focus are well positioned to continue generating long-term value for all our shareholders. On behalf of the Board of Directors, I am honoured to present the Annual Report and Audited Financial Statements of HLCB for the financial year ended 30 June 2024.

Our Group had achieved commendable performance as a reflection of improved local market conditions for our businesses and execution of the right strategies to drive results. To that end, our net profit increased by 96% to RM97.9 million driven by the improved performance of all operating entities and higher returns of HLCB’s equity investment. Correspondingly, the Board is pleased to declare a final dividend of 22 sen per share, representing an increase of 5 sen per share from last year, totaling RM54.3 million.

Hong Leong Investment Bank Berhad’s (“HLIB”) Stockbroking business staged a strong rebound, recording a 73% increase in Profit before Tax (“PBT”) to RM50.9 million, fueled by vibrant trading activities on Bursa Malaysia. More significantly, our market share in FY2024 grew by 0.23% to 4.08%, contributed by the increase flows from our institutional client segment. Our strength in execution and performance has been recognised with our fifth consecutive award as the 2nd runner up for Best Retail Equities Participating Organisation – Investment Bank at Bursa Malaysia’s annual Excellence Awards. HLIB’s investment banking business delivered a robust financial performance in FY2024 with revenue increasing by 20% y-o-y to RM63.9 million and PBT growing by 58% y-o-y to RM20.7 million. The better results were driven by the improved performance of Debt and Equity Market teams.

Our Debt Market division sustained its positive trajectory in FY2024 following the completion of key mandated deals, including a RM390.0 million sukuk issuance which earned multiple accolades. The Equity Market division also mirrored similar growth in FY2024, marked by the execution of HLIB’s first Environmental, Social and Governance (“ESG”) Initial Public Offering (“IPO”) on the ACE Market of Bursa Malaysia, raising RM58.9 million. Our investing and trading activities under Treasury & Markets division were impacted by the persistently elevated funding cost and coupled with the uncertain interest rates outlook, had resulted in a 23% decline in their revenue from the last financial year but were able to mitigate the impact through better trading performance.

Hong Leong Asset Management Bhd’s (“HLAM”) fund management business recorded a 94% y-o-y increase in PBT to RM19.8 million. This strong improvement was boosted by performance fee earned from managing private mandates for corporate clients, underscoring our effective management and investment strategies. This commendable performance was achieved despite the Assets Under Management (“AUM”) experiencing slight moderation of 1% y-o-y to RM10.1 billion as of 30 June 2024 driven by redemptions in Fixed Income and Money Market funds. Separately, the AUM for our Islamic funds managed by Hong Leong Islamic Asset Management Sdn Bhd (“HLISAM”) grew by 61% y-o-y to RM1.8 billion, solidifying our presence in the Islamic funds space. Our Hong Leong Dana Makmur Fund and Hong Leong Dana Maa’rof Fund were honoured with a combined total of 8 awards at the LSEG (formerly known as Refinitiv) Lipper Fund Awards Malaysia 2024, showcasing our commitment to excellence in fund management.

The Group’s balance sheet and risk metrics remained strong and well supported by solid and healthy asset quality. Our capital remains adequate with total capital ratio of our subsidiary, HLIB, remained healthy at 45.16% as at 30 June 2024, well above the minimum regulatory requirement of 10.5%.

Driven by the Group’s entrepreneurial philosophy and our commitment to customer centricity, HLCB is focused on value creation by executing our strategic priorities and delivering improved financial performance. In addition, the Group will also continue to play our role as a responsible financial services provider by actively engaging in sustainability-linked investment and financing activities.

• Driven by Technology and Innovation

HLCB’s steadfast commitment towards leveraging digitalisation to fuel growth and innovation in our business remains resolute, as the Group continues to invest in our digital infrastructure and capabilities. These efforts aimed at improving our operational resiliency and customer experience underscore our proactive approach in delivering enhanced value to our customers.

In FY2024, the Group successfully rolled out digital client account opening for our stockbroking and fund management businesses respectively. This initiative has improved customer accessibility by reducing account opening turnaround time by up to 60%. As at June 2024, we had successfully opened more than 1,800 new stockbroking accounts and over 440 new fund management accounts digitally. In addition, we are also in the midst of extending digitalising our stockbroking’s Shariah products, to broaden our reach into this segment.

The Group is also focused on expanding our suite of offerings in a bid to bolster our customer base and meet the unique needs of customers. With this in mind, our stockbroking arm has introduced an innovative solution which is a hybrid trading limit combining cash and collateral, called Flexi-Trade. This product offers our customers with a lower brokerage rate and higher trading limit in a single account.

Recognising the shift towards e-commerce, our stockbroking business partnered with Shopee, an online shopping platform, in April 2024 in a campaign to widen our reach to potential customers. Through the partnership, Shopee customers will enjoy brokerage fee waivers, making it easier for Malaysian to start their investment journey. HLIB was the first investment bank in Malaysia to offer such services via an online shopping platform.

• People and Sustainability at the Forefront

Our employees are our greatest asset and their development into the Group’s future leaders is essential in building a high-performance culture. In addition, we have also proactively expanded the scope of our employee development programme to equip our workforce with distinct adaptability skills in today’s ever-evolving business and technological landscape. This is exemplified by the Group’s decision to make ESG training mandatory in line with the increasing importance of sustainability, which led to a 90% y-o-y increase in total training hours amounting to 12,545 hours in FY2024 with an average total training hour of 22.6 hours per employee.

In addition, HLCB also provided financial support for qualified employees pursuing their professional accreditation, benefitting 43 employees in FY2024.

On the sustainability front, HLCB remains focused on embedding sustainability in our strategy and operations. Guided by our Sustainability Framework, the Group’s focus is based on four pillars, namely Engaging on Sustainability, Addressing Climate Change, Strengthening Internal Capabilities and Impactful Digitalisation.

Since embarking on its sustainability journey in 2022, HLIB has successfully completed RM8.24 billion worth of ESG/sustainability financing as at end June 2024. Additionally, the debt and equity teams achieved praiseworthy milestones in ESG/sustainability related fund raising transactions by completing Malaysia’s and the World’s first Climate Bond Initiatives qualified solar powered sukuk, the first green building asset securitisation and HLIB’s first ESG IPO listing on Bursa Malaysia, demonstrating HLIB’s commitment and capability in this space.

In June 2024, HLIB issued its first green RM100 million Tier 2 capital under its Green Framework, underscoring our commitment to sustainable finance. Additionally, we continue to drive ESG awareness via workshops conducted across the Group with 64% of our HLCB workforce having participated in these workshops.

Our dedication to the sustainability agenda has been widely acknowledged within the market with the winning of various notable awards and accolades on our completed deals and our inclusion in FTSE4Good Bursa Malaysia Index since December 2022. More meaningfully, our score improved to 3.1, which was above the industry average of 2.6 in December 2023.

• Strengthening Corporate Governance

We uphold the highest standards of corporate governance through a robust framework of internal controls and risk management practices. Our Board committees oversee risk management, compliance, controls, technology, cybersecurity and sustainability to ensure transparency and accountability.

Our comprehensive Code of Conducts emphasises ethical behaviour, enforcing a zero-tolerance policy towards bribery and corruption. Compliance controls are diligently monitored, with results reported to the relevant committees and continuous training is provided for directors and employees to up-hold high ethical standards and integrity.

Moving forward, we anticipate a modest expansion of the global economy for the upcoming financial year, supported by a resilient US economy and continued growth in Asia’s emerging markets. However, growth could be constrained from several factors, including a slower than anticipated monetary easing by major central banks, protracted geopolitical tensions and tightening in financial market conditions.

On the local front, Malaysia’s economy is expected to sustain its growth momentum backed by firm fundamentals, stable labour market conditions and its diversified economic structure. Steady domestic demand, services sector growth especially tourism and government investment and infrastructure projects, will augur well for economic growth and competitiveness in the long run.

For the new financial year, we will pursue our growth agenda with vigor and at the same time, be prepared to navigate a competitive and challenging business environment. We shall focus on our strategic priorities to deliver sustainable business performance and create long-term value for all our stakeholders, and stay disciplined in managing our capital, liquidity, cost efficiencies and embracing ESG principles into our business practices.

I would like to take this opportunity to express my appreciation and gratitude to the Board of Directors, management and our staff for their stewardship, dedication and hard work. My sincere appreciation also goes to our regulators, shareholders, customers, business partners and all other stakeholders. We value and look forward to their continued support.