This article first appeared in City & Country, The Edge Malaysia Weekly on May 27, 2024 - June 2, 2024

Started as a hardware shop in Alor Setar, Kedah, in 1974, Chin Hin Group Bhd (KL:CHINHIN) now has myriad diversified companies related to the property business. It is now helmed by group managing director Chiau Haw Choon, who took over the business 18 years ago when his father, executive chairman Datuk Seri Chiau Beng Teik, became unwell.

While his father had started the hardware business, Beng Teik expanded it by venturing into the cement trading business. About 15 years ago, the group diversified into multiple building materials distribution businesses. In 2016, Chin Hin was listed as an integrated building materials player.

Today, the group is involved in building materials manufacturing, construction engineering, property development, commercial vehicles provision as well as home and living. The wholly owned companies under the group are PP Chin Hin Sdn Bhd, Chin Hin Concrete Holdings Sdn Bhd, Starken AAC Sdn Bhd, Metex Steel Sdn Bhd and Stradaverse Sdn Bhd (formerly known as Chin Hin Home Three Sixty Sdn Bhd). Other subsidiaries include Chin Hin Group Property Bhd (KL:CHGP), Ajiya Bhd (KL:AJIYA), Signature International Bhd (KL:SIGN) and Fiamma Holdings Bhd (KL:FIAMMA) (associate company). With more than 3,000 employees, the group has a presence in 13 countries.

“Integration has always been our strategy. Eighteen years ago, I had a vision that the group would have a full supply chain for property development, ranging from building materials and construction engineering to furniture and home appliances. We believe this ecosystem creates synergy. We can leverage our internal competency to provide better solutions and services to our customers,” he adds.

For example, Haw Choon notes that the group’s upstream businesses are expected to receive an annual revenue of RM1 billion within two years, based on the group’s planned property launches. It means that the group’s internal construction engineering arm will receive RM500 million worth of in-house construction work. When the property projects are completed, the furniture and home appliance businesses will come in to furnish and fit out the units.

Not only does the construction engineering arm build the property projects under Chin Hin Group, it also takes up construction jobs for specialised buildings such as hospitals and data centres, as well as infrastructure works, which require high construction engineering skills.  

“Further downstream is our building materials manufacturing business, which is also the group’s biggest revenue contributor. Under this business, we have two companies, both clocking in an annual revenue of about RM1.7 billion. We are the country’s largest downstream building materials player with cement, steel, glass, metal roofs, bricks, wire mesh and so on. Last year alone, we captured transactions of about RM200 million between our building materials and construction engineering businesses,” Haw Choon explains.

Meanwhile, via its cabinet manufacturing arm Signature International, Chin Hin Group supplies about 50% of all projects in the Klang Valley with kitchen and/or wardrobe cabinets. This home and living business also allows the group to deal with end users. Signature International now has 50 outlets throughout the nation, offering home products such as loose furniture and curtains as well. The arm captures about 20% of the country’s market share, and Haw Choon hopes to increase its revenue by setting up 10 more outlets by the end of the year.

“On top of that, we also own Fiamma, where we distribute home appliance brands like Elba, Rubine and Faber. We provide fully-furnished units in most of our property projects now, and that creates a lot of synergy between Signature International and Fiamma,” he says.

“Now, we also want to leverage our building materials network. Through the network, we are also selling furniture and home appliances. I would say about 95% of the contractors and hardware dealers in the country are our customers.

“It’s like a waterfall; it first starts with property projects, then into construction, building materials, furniture and, finally, home appliances.”

Another strategy Chin Hin Group deploys is acquiring existing companies rather than starting from scratch because “we want the trusted brand that people already know”, Haw Choon says. “By buying into an existing business, we are able to leverage the branding immediately. If we start a new brand, we will still need to figure out the operation issues, the process issues and so on.”

However, Haw Choon does not plan to go into property management or property investment. He thinks property management is highly competitive and does not have a clear synergy with the other businesses. After disposing of its hotels in Penang and Alor Setar before the pandemic, Chin Hin does not have plans to return to property investment as it wants to conserve capital for property development.

Starting this year, Chin Hin Group will launch property projects with a total gross development value (GDV) of RM2 billion and above every year. This is part of its move to increase revenue and profit by tapping the synergy between its various businesses.

“We want to focus on the business that gives us high growth, revenue and profitability, so we are very comfortable in the five sectors that we are in. These five sectors are also closely related to the country’s economy, so literally every Malaysian is our customer. Therefore, in the short term, we don’t plan to venture into new businesses but continue to focus on our existing ones, where there are still a lot of opportunities to grow further. If we are in a saturated business where growth is limited, then we will consider venturing into a new business,” says Haw Choon.

“This year, we are in the pipeline to launch RM2.4 billion worth of projects, involving six developments across four states — Kuala Lumpur, Selangor, Penang and Melaka. For now, we don’t have plans to venture overseas because the property development business is a highly regulated business …  it is also considered a high-risk business.”

The six projects are Aricia Residences in Sungai Besi, Dawn KLCC in Jalan Ampang, Andalan Residensi Wilayah in Bukit Jalil, Botanica Hills Phase 1 in Rawang, Crown Penang on Penang Island and a project in Melaka.

With a GDV of RM467 million, the recently launched freehold Aricia Residences offers 612 serviced apartment units in two blocks on a 2.615-acre parcel. The units come in four layouts, with sizes ranging from 872 to 1,420 sq ft, and are selling from RM680,000. The maintenance fee is 38 sen psf.

Facilities include a swimming pool, an infinity pool, a sunken wet lounge, a Jacuzzi, an open lawn, a reflexology path, a children’s playground, a barbecue deck, a gymnasium, a games room and a co-working space.

The project is accessible via Maju Expressway, East-West Link Expressway, Sungai Besi Expressway, Middle Ring Road 2 and Federal Highway.

Dawn KLCC is a RM892 million development on a 1.41-acre site that offers 960 office suites and serviced apartment units ranging from 348 to 835 sq ft. They are priced from RM713,000. The maintenance fee is 77 sen psf. Facilities include a swimming pool, a parcel room, a games room, an indoor and outdoor play gymnasium, a co-working space and a gymnasium.

Botanica Hills Phase 1, which has a GDV of RM153 million, is part of the 56.63-acre township and will offer 253 double-storey terraced homes. 

The RM458 million Crown Penang will have 588 serviced apartment units. The Melaka project, which spans 18.26 acres, will offer low-rise and high-rise serviced apartments. Phase 1 will have 537 units on a 7.43-acre plot.

“As we aim to launch at least RM2 billion worth of projects every year, we will buy more land in three states — Johor, Penang and Melaka — where most of our launches are high-rises. We target obtaining an annual revenue of RM1 billion from property development in the next two years,” Haw Choon says.

“If you look at the market, those projects can sell well based on three factors. The first is the location, then the pricing, and the third thing is the product. The projects we are in are all in good locations, and we price [slightly lower] than our competitors. Look at Dawn KLCC, our competitor is selling at RM2,000 psf and above, but we are only selling at RM1,700 psf. And in terms of product, all our projects engage famous architects. We place a strong emphasis on finishing, facades and features because we want to compete in terms of product. By having good location, good pricing and good product, we think we are quite competitive.”

Chin Hin Group and its associates have a land bank of 93 acres across the Klang Valley, Penang and Melaka, with a total GDV of RM5.3 billion.

Chin Hin Group positions itself as a property developer that provides affordable premium housing and targets a Quality Assessment System for Building Construction Works score of 80% for each project. This decision to go into the premium product segment came about after a defect issue at one of its completed projects went viral two years ago.

“That is a painful lesson that we have learnt and it is a wake-up call. Before that, I didn’t know that I was thin-skinned and that I could not take complaints. I remind my [property] CEO that I cannot take complaints ... After that incident, we emphasised and reminded the team that we didn’t want this to happen again. I am also thankful for that project because I realised that things don’t come easy because we didn’t have many complaints about our previous projects,” Haw Choon quips.

“Therefore, we want to be niche and premium. Because when you offer something at an affordable price, buyers still expect you to deliver high-end or premium products, and you can’t help but have customers come to complain about the defects. We would rather be in a slightly premium segment, and we make sure our quality is premium. Same as our products at Signature International and other home appliances [under Fiamma], which are considered premium brands among the local brands.”

Today, the group has a customer relationship management team that handles the submission of complaints of defects to ensure timely rectification. This is to ensure that not only customers have a good experience during the house-buying process but also during the construction process, as well as during and after handover.

This not only brings satisfaction to its customers but also to its employees. Haw Choon says his ultimate aim is to build a respected organisation — not only financially but also to deliver good products and services — and treat its people well.

By the end of this year, three business groups — building materials, property development and construction engineering — will move into a new corporate office in mixed-use development 8th & Stellar @ Sri Petaling in Kuala Lumpur.

“We want to invest and create an impressive working environment for our people. Without the people, we wouldn’t be who we are today. Our inspiration is that the 3,000 employees in Chin Hin Group will continue to prosper. One of the biggest satisfactions I have is to see our employees continue to do well. It’s not only to do well in their career; it’s also to do well in many parts of their lives.”

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