Syed Azman faces test of turning HHRG assets into earnings

KUALA LUMPUR: HHRG Bhd's recent appointment of Tan Sri Syed Azman Syed Ibrahim as executive chairman presents a critical test for the company, as it seeks to transform its assets into higher earnings. Syed Azman, a renowned Malaysian entrepreneur and founder of Weststar Group, assumes leadership at a time when HHRG faces challenges with reduced operating performance and a shift towards diversification beyond its traditional biomass and fibre sectors.

Syed Azman's primary duties involve managing the group's expansive 60.7-hectare development in Sungai Petani, Kedah, its Kulim land bank, and exploring potential new investment opportunities. The appointment comes at a crucial juncture, as HHRG's financials deteriorated significantly in the nine months leading up to June 30, 2026.

Revenue declined by 22.4% year-on-year to RM70.76 million, and the company reported a loss of RM5.92 million attributable to shareholders, a stark contrast to the previous profit of RM2.24 million.

Although HHRG's most recent quarter showed a slight improvement with a net profit attributable to shareholders of RM643,000, revenue still decreased by 23.4% to RM23.3 million. The decline in performance is attributed to factors such as weakened furniture demand, the sale of its mattress manufacturing business, currency fluctuations, shipment delays, and lower biomass sales, in part due to raw material shortages.

Syed Azman's appointment provides a clear challenge for HHRG: convert the company's asset base into recurring, superior earnings. Given his extensive experience in automotive, commercial vehicles, aviation, property, and construction, Syed Azman's expertise could prove invaluable in structuring partnerships and attracting investors for the Sungai Petani project. By leveraging his business network, HHRG may be able to strategically develop commercial components around the site, rather than merely monetizing the land.

However, investors will likely focus on the broader market reaction to the appointment, despite the significant change at the helm. HHRG's shares closed at 14.5 sen on September 4, following an earlier peak of 16 sen in the week. Although the stock experienced a sharp rise from 11.5 sen on August 26, it remains substantially below its 52-week high of 18.5 sen. Consequently, the market seems to be pricing in expectations of change, yet the effectiveness of Syed Azman's leadership remains to be seen.