Kentrade Webinar l LMS Compliance Ltd. Corporate Presentation

Company & Value Proposition (LMS Compliance Ltd.)

• Core business: Testing, certification, assessment, and assurance services across:
  • Environmental
  • Food / product safety
  • Workplace safety & hygiene
  • Industry compliance
• Positioning: A trusted third-party assurance provider designed to reduce technical barriers to trade and support compliance requirements—expanding further due to ESG / Environmental regulations.
• Origins: Founded in 2006 by Dr. Luis Oie (he did not attend the webinar). Described as homegrown/independent and Singapore-listed.

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Footprint & Operations

• Laboratories: 3 laboratories in Malaysia
  • Penang
  • Shah Alam (KL)
  • Johor / related site (subtitled as “Jabaru”)
• Workforce: ~110 employees across all locations.
• Scale (as of last year / December):
  • >1,100 active “created tests” (subtitle wording unclear)
  • >10,000 “nonacreated tests” (subtitle wording unclear)
• Customer repeatability:
  • ~80% of revenue from repeat customers
  • Majority from the testing & assessment segment

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Financial Highlights & KPI-Style Metrics

Reported timeframes

• FY 1H 2022 vs 1H 2023
• Dividend policy commitment referenced across FY 2022–FY 2024

Key reported figures

• Revenue growth: +13.1% in 1H 2022 → 1H 2023
  • RM 8.8m → RM 9.9m (as stated in subtitles)
• Profitability change: +13.1% YoY (context suggests profit up YoY, aligned with 1H figures)
• Net profit: approximately 2.7 → 2.6 (currency/unit not specified; appears to be first-half comparison)
• Margins:
  • Margin decreased: 45.6% → 43.9%
  • Net margin decreased: 30.3% → 26.6%
• Dividend policy:
  • Directors commit to minimum dividends of 20% of group profit for FY 2022, FY 2023, FY 2024

Seasonality & margin drivers (Q&A)

• Seasonality: not heavy overall, but 1H is ~4–5 percentage points lower than 2H
  • Attributed to year-end budget execution (“things that need to be done need to be done”)
• Halal season: lower food industry activity (fewer samples/participation)
• Margin drivers:
  • Small currency impact: Malaysian currency weakening affects some chemicals/equipment sourced from Europe
  • Management said it’s not a major issue due to limited heavy CAPEX exposure

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Competitive Landscape

• Competes against “big boys” (mostly Europe-based), including:
  • Bureau Veritas
  • TÜV
  • SGX Eurofins
  • Intertek (Exact list may be partial based on subtitle coverage.)

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Business Strategy: “Four/Five Pillars” & Revenue Mix

Revenue composition by segment (reported % of total revenue)

Testing & assessment (cash cow): ~96.1%

Industry mix within testing:

• Food & feed: 36%
• Medical devices: 14% (growth noted via landing an MNC customer)
• Greentech: 18%
• Pharmaceutical: 13%
• Healthcare: 17%
• Household: 2%

Certification / ISO certification: ~1.5%

Examples cited:

• ISO 14001 (environment — subtitles show “14,000”)
• ISO 45001 (occupational health & safety — subtitles show “45,000”)
• ISO 22000 (food safety — subtitles show “22,000”)
• ISO 37001 (anti-bribery management system — explicitly discussed)

Trading / distribution of lab items: ~1.6%

• Executed via a subsidiary (subsidiary name appears unclear in subtitles, e.g., “Anemic Science Sdn Bhd” style spelling).

Digital income / conformity assessment technology: described as emerging

• Sub-products mentioned:
  • IKIN
  • IISO cloud-based platform
  • Laboratory management system
  • Continuous QR-code assurance
• Earlier deck: “digital income” cited around ~8% revenue
• Q&A: reinforced as a key growth target (“rising star”)

ESG assurance / validation / verification

• Presented as the latest segment; described as emerging
• At time of talk: no external customers yet
• LMS is preparing ESG reporting for itself and aiming to comply with standards

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Playbooks / Frameworks Referenced

Digital products described as subscription-based “systems”

• IISO (ISO cloud-based)
  • Yearly subscription for storing and managing ISO certification documentation after audits
• ILIMS / Laboratory Management System
  • Yearly subscription (likened to a Microsoft SaaS model)
  • Subtitles suggest “registration free registration,” improving adoption and enabling geographic footprint tracking
• IKIN “continuous civilization” (continuous assurance)
  • QR-code based customer-facing proof that a product was tested recently and continuously

Governance & ESG standards (frameworks named)

• ESG reporting compliance mentions:
  • TCFD (climate-related disclosure)
  • GRI (subtitle confusion possible: “GRRI/GCI” referenced)
  • SASB
• ESG services described as validation/verification, linked to:
  • GHG inventory
  • Product carbon footprint
  • Emission reduction projects

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Key Certifications & Assurance Capabilities (Examples)

• Testing & compliance: environmental (e.g., water quality, noise) and EIA-related compliance across Malaysia / Singapore context
• ISO certification services, including:
  • ISO 37001 anti-bribery management system
    • Emphasis on documented processes, employee training/awareness, and annual sign-offs (robust process approach)
• GHG / climate services:
  • Validation of emission reduction projects
  • Assessment of carbon lifecycle and product carbon footprint
  • Support for carbon pricing ecosystem / carbon trading readiness
  • Mentioned authorization/license: “Double A 1000 licensed assurance provider” to a subsidiary (exact meaning unclear in subtitles, but presented as capability authorization)

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Concrete Product / Customer-Facing Example

Consumer transparency via QR code (IKIN)

• Consumers can scan a QR code on product labels/bottles to view test timing, e.g.:
  • “two weeks ago” / “one month ago” type timelines
• Narrative angle: supports comparison of testing progress over time, contrasting ongoing assurance vs one-off compliance checks

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Go-to-Market & Scaling Approach

Organic growth + “stickiness” via testing frequency & proof

• LMS positions continuous assurance as a differentiator:
  • Competitors may test once a year for licensing
  • LMS emphasizes monthly/weekly testing (as stated in Q&A)
• Trust-building lever: “brand name equals quality” and ongoing reassurance

Digitization as scalable growth (subscription model)

• Strategy: scale digital conformity assessment products rather than building labs in new geographies
• Growth thesis: once foreign M&A opens up (especially China), digital products should expand rapidly due to easier deployment than physical lab build-outs

Inorganic growth (M&A playbook)

• Management states it is actively searching and engaging potential M&A across the region, emphasizing:
  • China
  • Singapore
  • Thailand
• Strategy described as faster inorganic growth to complement organic testing expansion

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Milestones (Selected Timeline)

• 2006: Company founded
• 2007: “Created” / testing lab rollout (subtitle wording messy)
• 2008: Rollout of laboratory management system
• 2009/2010: First private laboratories in Malaysia for safety testing (subtitles mention “17025” across chemistry/microbiology—interpreted as accreditation-related capability)
• 2011: Expansion to KL with a new lab
• 2013: Establishment of a trading entity to separate activities from core labs
• 2015: Move into Johor; third-party assessment services begin
• 2016: Launch ISO certification in the cloud
• 2017: Group consolidation; new entity created for Penang operations
• 2018: QR code rollout to reduce cost and improve traceability (subtitles mention an “Amea management system,” unclear)
• 2020: Early face mask testing certification effectiveness (pandemic-era)
• 2021: Licensing laboratory system to third-party labs (Guing unclear)
• 2022: Continuous assurance program rollout (“continuous civilization”); sales office in Kotabaru

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Corporate Governance & Leadership

• Board independence: 71.4% independent directors
• Board diversity: 57.1% board diversity (women directors noted as 42.9%)
• Notable board members/profile highlights:
  • Dat Fadila: Independent Chairman; former Director General, Department of Standards Malaysia (2016–2020 per subtitles)
  • Tansri Dr. Gui Hosoon: Independent Director; chair of Nominating Committee; EPF panel member; Securities Commission linkage; chartered accountant
  • Miss Wong: Non-executive / Independent Director; law firm partner; listed company board role mentioned
  • Mr. Bing Chai: Independent Director; Singaporean; 27+ years accounting/audit/due diligence/M&A expertise
• Management:
  • CEO: Dr. Luis (subtitles say “Dr. Luis Oie”)
  • CDO (Chief Development Officer): wife Miss Chong Moi (technical background)
  • Financial Controller: Mr. Quan (presenter)

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Future Plans (Execution Priorities)

• Digital transformation:
  • eliminate hard-copy documentation (subtitles: 100% paper eliminated; use iPads)
• Strategic alliances:
  • seek business partners across China / Singapore / Thailand
• ESG expansion:
  • prepare to commercialize ESG assurance/validation/verification services
  • currently no external customers yet
• M&A: continue evaluating acquisitions to accelerate regional scale
• Carbon / ESG readiness:
  • build capability as companies increasingly need sustainability reports and carbon footprint assurance

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Investing / Markets (High-Level Only)

• Discussion includes:
  • Singapore Exchange listing
  • institutional vs retail participation (asked/answered: “mostly retail”)
  • comments on liquidity and trading interest
• No detailed investment thesis or valuation metrics were provided.

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Presenters / Sources Mentioned

• Mr. Quan: Financial Controller, LMS Compliance Ltd. (presenter)
• Adrian: moderator / question asker (also references webinar host role)
• Dr. Luis Oie: Founder/CEO (referenced as unable to attend)
• Miss Chong Moi: wife of Dr. Luis Oie; Chief Development Officer
• Dat Fadila: Independent Chairman (board profile)
• Tansri Dr. Gui Hosoon: Independent Director / chair of Nominating Committee (board profile)
• Miss Wong: director profile (law firm mentioned)
• Mr. Bing Chai: independent director profile (accounting/audit/due diligence experience)
• Competitor brands cited:
  • Bureau Veritas, TÜV, SGX Eurofins, Intertek
• ESG frameworks referenced:
  • TCFD, GRI, SASB
• Standards/certifications referenced:
  • ISO 14001, ISO 45001, ISO 22000, ISO 37001
  • ISO/Accreditation reference via timeline: 17025 (as mentioned in the milestones section)