✨ BJCORP and its 7 Listed Companies - Part 2
A primer about the 7 listed companies of the Berjaya Group
Edit: This article was previously titled “BJCORP and the 7 Listed Subsidiaries”. The title has since been edited to “BJCORP and its 7 Listed Companies” - as in the course of researching for Part 3, I discovered that some of the listed Berjaya companies were in fact not subsidiaries of BJCORP. Apologies for the mistake; but fortunately, it doesn’t affect the investment thesis in any way.
If you’ve been following my blog, I posted awhile back about The Security I Like Best in ASEAN today - Berjaya Corporation (BJCORP). The full 10,000 word research report can be found in the link below, in all its intricate glory:
I usually stick to analyzing small-caps in the ASEAN region, as I think that’s where most of the value lies in stocks in this part of the world, for several reasons:
the higher likelihood for mispricings to exist (vs an index component stock);
their higher risk:reward vs EM large-caps due to lack of discovery; and
the fact that if you’re investing in EMs in the first place, you might as well go all-in on growth or value; since moderation usually isn’t the top priority.
Now, BJCORP really stood out to me initially because of its ultra-depressed share price vs intrinsic value, i.e. large margin-of-safety. The great thing about investing in EM stocks with a large margin of safety is that the large gap between price and value allows the investor to absorb nearly any type of uncertainty - regardless of what form that uncertainty might take. Poor corporate governance? Check. Volatility in the macroeconomic environment? Check. Sociopolitical upheaval? Check. Some guy tripping over a wire due to poor safety protocols, thus causing a fire to break out? A large margin of safety in your stock positions will ensure that you sleep well at night no matter what happens - good or bad.
What really took me by surprise, however, was the sheer breadth of analysis required to gain a full comprehension of this company. If you’ve read my earlier Part 1 report about BJCORP, you’ll know that the reason for this is because the company is actually a conglomerate - whose share price has since fallen to small-cap levels.
To further clarify, BJCORP has 7 listed companies under its wing, and about a dozen more smaller operating businesses harbored under the main BJCORP listed entity. This is what their corporate structure looks like:
Hence, even ignoring all their less relevant listed companies, the research scope involved to gain a full comprehension of BJCORP is still roughly the equivalent of analyzing at least 2-3 separate companies. In order to deliver the information in a more manageable manner, I thought that I’d lay out the context for the actual numbers-diving (and some of the more miscellaneous stuff) here - so that we can blaze through the accounting-heavy analysis in Part 3. Don’t worry, it’s going to be worth the wait. I promise.
If you’re a Malaysian, most of the operations of these companies should already be familiar with you. But for those of you located outside of Malaysia, it’s understandable how the listed subsidiaires of the Berjaya group might seem like a black box at first - especially with tickers like BJTOTO, BJASSET and SEM. Hence, this article is meant to help you get up to speed on what these listed companies actually do, so that you have all the necessary background context to hit the ground running in the upcoming Part 3 article.
Without further ado, let’s get into it.
The 7 Dwarves of BJCORP
As mentioned, the Berjaya Group has 7 listed companies. They are:
Berjaya Philippines Inc (tikr.com - requires free sign-up)
Note: The word ‘Berhad’ simply means something akin to ‘Limited Liability Company’.
* A kind reader pointed out in the comments that SEM is in fact not a subsidiary of BJCORP. He is correct - actually it is BJCORP’s founder Tan who cumulatively controls SEM, not BJCORP itself. The title of the article has also been edited slightly to reflect this updated information.
If you’re observant, there are actually 9 companies listed here, even though I said 7 just earlier. Why?
Well the 8th company on the list, BAUTO, used to be a Berjaya listed company. Bermaz Auto Berhad is so named because it is the local Mazda distributor - and used to be called Berjaya Auto Berhad before. It’s obviously still listed, but there was a management buyout in 2016 where BJCORP and the Tan founding family mostly disposed off their stake in the company. And yet, BAUTO can still be found mentioned on BJCORP’s website as one of their listed companies:
Meanwhile, the 7th company on the list, Atlan Holdings Berhad, is notably absent from the same BJCORP website - despite qualifying as one of their current listed companies. And obviously, Berjaya Philippines Inc gets a pass.
(By the way, I actually quite like BAUTO as a stock idea, and might even decide to write about them in the future. Check out their historical financials on TIKR.com to see why.)
So now that we’ve gotten those two out of the way, let’s focus on the remaining 7 dwarves of BJCORP.
Get a 30-day trial for FREE to read the rest of this 6,000-word report by clicking this button!
The mainstay of BJASSET is the humungous 48-storey behemoth of a shopping mall, aptly named Berjaya Times Square. According to its Wikipedia page, it is the 16th largest building in the world by floor area - and hides within its cavernous belly 1,000 retail shops, 1,200 luxury service suites, 65 food outlets, and an entire theme park (complete with roller coaster). On top of that, it is located smack in the middle of the most “touristy” area of Kuala Lumpur (Malaysia’s capital city) - and within walking distance of the country’s local equivalent of Wall Street. As if literally an ivory tower, the top floors of Berjaya Times Square houses the headquarters of the Berjaya Group.
Keep reading with a 7-day free trial
Subscribe to Value Investing Substack to keep reading this post and get 7 days of free access to the full post archives.