LEONG HUP INTERNATIONAL BERHAD (LHI)

Leong Hup International Berhad (LHI) - Southeast Asia's Largest Integrated Poultry Producer

If you have ever eaten chicken in Malaysia, Indonesia, or Vietnam, there is a good chance it passed through the Leong Hup International supply chain. LHI is not simply a chicken farm - it is Southeast Asia's largest integrated poultry and livestock feed producer, operating across 5 countries with a market capitalisation exceeding RM2.7 billion.

Listed on Bursa Malaysia (code: 6633), LHI operates across two core segments: Feedmill Business (livestock feed manufacturing) and Livestock Business (poultry farming, egg production, processing). What makes LHI unique is that it controls the entire value chain - from raw grain to your dining table.

Vertical Integration Advantage

LHI's business model is fully vertically integrated:

• Upstream: Feed mill operations - corn, soybean, compound feed production
• Midstream: Breeding (parent stock), hatchery operations, grow-out farms
• Downstream: Processing (slaughter), packaging, and distribution to supermarkets, wet markets, and food processors

This vertical integration gives LHI a significant cost advantage over competitors that rely on external suppliers for livestock feed. Feed costs represent 60-70% of total poultry production costs - by owning feed mills, LHI can manage margins far more effectively than integrated competitors.

Geographic Footprint - 5 Countries, 1 Leader

Shariah Compliance ✅

LHI has been confirmed as a Shariah-compliant stock by the Securities Commission Malaysia's Shariah Advisory Council. Muslim investors, Islamic unit trusts, and EPF (Shariah savings) holders can invest without concern from an Islamic investment perspective.

Current Market Data (April 2026)

Balance Sheet Improvement Story

One of the most compelling narratives for LHI over the past 3 years is the dramatic reduction in net gearing ratio - from 1.1x (FY2022) to just 0.39x (3Q25). This demonstrates exceptional financial discipline in managing debt while simultaneously expanding regional operations.

⚠️ Key Risk: MyCC Fine of RM157.5 Million

LHI's subsidiary, Leong Hup Feedmill Malaysia, was fined RM157.5 million by the Malaysia Competition Commission (MyCC) for alleged price-fixing in chicken feed (2020-2022). The Competition Appeal Tribunal upheld the fine in February 2026. However, the High Court granted a judicial review leave AND interim stay in March 2026 - the fine is currently suspended pending the case. If upheld, this represents ~31% of FY2025 net profit.

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