SYF ready to enter property development business

by **hlk** Mon 12 Dec 2011, 08:17

Kuala Lumpur: Datuk Chee Hong Leong has a
growing reputation in the market and he is putting it at stake by
driving SYF Resources Bhd into the property development business.

In the meantime, he has also emerged as its second largest shareholder, owning slightly over 10 per cent of the company.
“I
wouldn’t be here if I didn’t believe that the property business for now
is the best model for SYF,” said Chee, who was recently appointed as an
executive director.

Chee emerged as a force in the company at the same time as Datuk Chew Lak Seong and Datuk Eric Ong Kook Liong, the two men
behind privately held KIP Group, which is involved in the property business.

The
two own just slightly more than 14 per cent of SYF. Chee is banking
that by cleaning SYF’s balance sheet, he will be able to take the
company to the next level. The spring cleaning of the
balance sheet has helped SYF to post a net profit of RM39.24 million in the first quarter ended October 31, 2011.

Now that the restructuring is done, SYF is hoping that the property
development business will become the company’s second core business and
help provide it with a stable income stream.
“We are also expecting our timber manufacturing business to post double-digit growth,” said Chee.

A double-digit growth should help the manufacturing business to rake in as much as RM200 million this year.

The margins, according to industry experts, could be as high as 10 per cent due to the flooding in Thailand.

Nevertheless, Chee, who has been involved in the property business
for nearly half a decade, felt that it was the property business that
would take SYF to the next level.

He added that in the initial
stage, SYF would not be depleting its cash reserves, saying that the
company would instead enter into joint ventures to help develop
properties.

The rationale is that SYF wants to build up its brand name first before undertaking bigger jobs.

"With land ownership, you can't go wrong because as they say 'God
don't make land any more'," said Chee, whose goal in the current
financial year is to keep SYF as a single-digit Price-to-Earnings
company.