Sasbadi Holdings Berhad is a major publisher of educational materials, especially for primary and secondary school education, in Malaysia.
Incorporated in 1985, the 3 co-founders set out to publish quality educational materials for all students. Today, students in Malaysia, ranging from city elite schools to “kampung” schools, are toting Sasbadi school books in their hands as they journey through formal education.
While most of their educational materials are based on the Malaysian National School Curriculum, they also publish other non-curriculum based educational materials and general title books.
On 24th February 2017, 8IE Malaysia team, and a group of support stars (volunteers) visited Sasbadi Holdings Berhad, to interact with the leaders and understand the company and its industry.
Overview of the Company
Sasbadi (incorporated 1985; listed on Bursa Malaysia 2014) has three business divisions:
Source: Sasbadi Annual Report
Print publishing forms the bulk of Sasbadi’s business. Below are the company’s financial highlights:
Source: Sasbadi Annual Report
Clearly, Sasbadi has performed well since 2012, with strong revenue growth and margins. Here’s what has made Sasbadi a household name:
Sasbadi’s key product: print publishing, e.g., text books, reference books, and examination question compilations that nearly all Malaysians have been using for two generations
Digital Publishing Products for online learning
Applied Learning Products to provide practical and hands on learning experience
As of March 2017, Sasbadi’s share price appreciated 212.2%, or approximately 28.4% per annum, for 3 years since its listing in 2014.
Source: Google Finance
Recognising Sasbadi’s consistent performance and excellent prospects, we visited Sasbadi and were warmly hosted by Mr Law King Hui, their Managing Director.
During our visit, everyone in our group felt a strong sense of Mr Law’s passion for his business, and were awed by his in-depth industry knowledge.
Mr Law shared with us that the education industry is one of the few industries where demand creation is not necessary as education is the birth right of every citizen.
He shared the latest developments, technologies, and strategies to improve Sasbadi’s competitive edge.
Mr Law demonstrating Sasbadi’s latest technology (developed in-house)
We also discovered that Sasbadi is way ahead of its time in the field of education. Although they already possess a strong advantage in the industry, they are not complacent.
Instead, they are constantly widening and deepening their MOAT. This is the quality of an excellent management team!
Our team is impressed with the capabilities and passion that Mr Law and his team have for their business.
Here are five things we learned from this visit:
- Sasbadi is using their acquisition strategy to grow. Many companies in the industry have been serving their customers for a long time, and have a valuable brand. However, they are either not profitable, or the latest generation may not wish to take over, leaving them little choice but to sell their business to Sasbadi. Instead of creating its own brand presence, Sasbadi chooses to acquire these companies, saving time and other resources.
- Sasbadi has an in-house editorial team to create/curate content for their books. Hence, no royalties are needed to be paid.
- Although digital education is not widely used in Malaysia at this time, Sasbadi is prepared in terms of their innovative capabilities to ride the technology wave when it arrives.
- Sasbadi has been organizing the National Robotics Competition (NRC) since 2005.
- The Malaysian government is focusing on encouraging Science, Technology, Engineering, and Mathematics education (STEM), and Sasbadi has been dominant in this area.
Disclaimer: All facts and opinions presented are for educational purposes only. This is not a recommendation to buy or to sell. The author(s) involved in the writing of this message do(es) not have current vested interest in the company. Please consult a professional for expert financial or other assistance or legal advice.