GSH gearing up for leadership transition

GSH Corp, a consumer goods distributor-turned-real estate firm, is facing a renewal of sorts since Singapore tycoon Sam Goi took control of the firm three years ago.

While its transformation into a real estate player remains a work-in-progress, Singapore-listed GSH may be on the cusp of a leadership transition involving the business empire of one of Singapore's richest men.

"I have been training my children and loosening my grip on the business to allow my children to do things on their own," says Mr Goi who apart from his flagship real estate listco GSH, of which he owns 48 per cent, also owns privately-held Tee Yih Jia Group, a US$1 billion (S$1.41 billion) annual sales global food business.

That could very well happen sooner than later. "Now is the time. I'm quite happy. I would like to take it easy and spend more time on society and charity work."

The admission is a sharp turn for the go-getter businessman who only a year ago had remarked that retirement was not on the cards as it would be "lonely" and he wouldn't know what to do with all that free time.

What has changed?

"We have a really good team at GSH. They are very steady," says GSH executive chairman Mr Goi, 66, who has four children. While three children are involved in the different pockets of the family business - food, real estate and investments - his eldest daughter chose to follow her own path in a teaching career.

The blocks appear to be neatly in place for the succession plan which for now has no definitive timeline.

His second daughter Laureen is an executive director at Tee Yih Jia while in July 2012, his third child Kenneth took up a senior role as executive director (business development) of GSH.

"Kenneth has been working very hard, day and night and is very hands on. I have been watching him and guiding him, when necessary," says Mr Goi.

But is Kenneth ready to fill his father's shoes? "Definitely. We have been ready from day one," says Kenneth at the first father-son interview. "My father shares the direction ahead with us while our management team has been doing the execution," says the low-profile Kenneth, who before joining GSH founded and ran a successful food logistics firm in 1999.

"It's not so much that we need to take over our father's business but we are passionate about it. We watched how my father did things over the years and while there is a generation gap, we took in virtues like being hands on and understanding the business inside out," he adds.

The time, as Mr Goi himself admits, may be ripe for him to step aside. The fruits of GSH's transformation have begun to show up in the headline figures. With the divestment of the trading and distribution businesses completed in 2014, GSH turned in a net profit of S$6.5 million in the third quarter ended September 2015 from a loss of S$6.4 million a year ago on the back of a 60 per cent improvement in the topline to S$24 million.

Up until May 2012, GSH was known as JEL Corp, an ailing electronics distributor which Mr Goi had invested in as far back as 2007. Five years later he emerged as the company's white knight, upping his stake after the stock plunged ignominiously as it started bleeding red ink, exacerbated by a fraud scandal involving its key executives. Soon after he emerged with a majority stake, Mr Goi led a transformation of the firm into a real estate company and the plan is to "grow all my property (assets) in this company", he says.

Next year, things could shape up well for GSH which has snapped up nearly S$600 million worth of property assets over the past 24 months in Singapore and Malaysia.

Mr Goi is poised to work his "China magic" on GSH by mid-2016, a plan that had galvanised GSH stock in the early days of his emergence as a shareholder given his strong ties and network in the country.

"We are going to concentrate on China. Actually, when we started GSH, that was my number one plan," admits Goi. But China's once-in-a-decade leadership transition then, plus an overheating property market which triggered a housing glut, derailed that agenda.

Plan B, as it turned out, comprised several opportunistic acquisitions of prime land in Kuala Lumpur and a resort with two huge land parcels in Kota Kinabalu in Malaysia - and the buyout of GSH Plaza, then called Equity Plaza, in Singapore's central business district Raffles Place.

The firm's majority owned GSH Plaza in Singapore saw a 60 per cent take up following a launch of 100 office units in March this year. The sale strategy has been tweaked since. "We stopped selling on a per unit basis. We want to sell a whole floor and we are very selective about our tenants as our office will also be there. I'm not in a hurry (to launch)," says Mr Goi.

For now, Sutera Harbour, a resort with two five-star hotels in Sabah, East Malaysia, is the firm's key earnings driver. According to Kenneth, the hotels have an occupancy rate of 60 per cent (much higher at 80 per cent if you don't count the rooms that have been closed for refurbishment) and draw tourists from Korea, Taiwan, Hong Kong and China.

It is also building two ocean-front residential projects on the land parcels close to the resort, a project that Mr Goi said is drawing a great deal of interest. "A lot of people are waiting as it's in the best location in KK ... it faces the sea and behind it overlooks Mount Kinabalu." GSH is building a high-end 54-storey service apartment project in Kuala Lumpur's "Golden Triangle'', which it expects to launch next year in the hope that the soft property market would be on the mend. "My people are very excited about next year. We must make it happen. We cannot just promise," says Mr Goi.

This article was first published on November 30, 2015.
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