SME 100 Survey: Innovation and Increased Profit Margin

SME100 unveiled the top 100 small and medium enterprises (SME) in the country as ranked by growth and resilience. Winners of the award, organised by SME Magazine and Small and Medium Enterprises Association of Malaysia (SAMENTA), shown an average revenue growth in 2015 of 25.4 percent versus 13.9 percent among all SMEs surveyed.

A total of 6,000 SMEs were surveyed between April and September this year, with scoring taking into consideration growth in revenue, profits and market share, and resilience as demonstrated by consistent results, clear management directives and sustained investment in training and research and development.

The winners of the SME100 awards received their award statuette from Dato’ Othman Aziz, Deputy Finance Minister I, in the presence of Dato’ William Ng, group publisher of Business Media International, the owner of SME Magazine, and Koay Chiew Guan, president of SAMENTA.

Data for the survey was provided by Credit Bureau Malaysia, with Cheng & Co Chartered Accountants providing financial verification of participating companies. Bukit Bintang City Centre was a sponsor of the Awards, which is supported by Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) and Malaysia International Chamber of Commerce and Industry (MICCI).

SMEs Continue to Outperform Economic Growth

SMEs continue to out-perform the country’s economic growth. While Malaysia’s GDP grew by 5 percent in 2015, the average surveyed SMEs’ 13.9 percent top-line growth represents close to a three-to-one ratio. This further reinforces the role of SMEs as engine of economic growth, and an important hedge against global economic uncertainty.

Dato’ Ng says, “what separates top performing SMEs from the rest is the quality of growth. This is largely the result of carefully planned expansion and effective use of financial resources and talents”. While revenue grew by 25.4 percent among the top 100 SMEs, profit grew by a whopping 77 percent.

Among SME100 winners this year are Aspen Vision Development Sdn Bhd, Principle Perspective Engineering Sdn Bhd, RC Precision Engineering Sdn Bhd and YCL Precision Engineering Sdn Bhd.

Leader, Enabler and Winner
The technology sector continues to lead for the fourth year running as the fastest growing SME sector in Malaysia. Constituting 22 out of 100 fastest growing SMEs in Malaysia, the industry continues to thrive with the push of global digitalisation. The technology sector is also cited to be the enabler for business growth in the survey, continuing to serve as foundation in a trail of expansion plans by other sectors.

Followed closely is the construction, property development and building materials sector, with the nation’s oil & gas, mining and energy sector slumping down to third.

On the other hand, some sectors had a challenging year as they failed to pass the nomination margins, namely the financial services sector and hospitality & tourism sector. Both sectors for the first time since the establishment of the awards in 2009 failed to have any representatives among the final 100.

Dato’ Ng says, “Malaysia is undergoing a long overdue structural adjustment. The GST is a more visible representation, but as we transition from a production-based to a digital- and innovation-based economy, SMEs can expect to see even more changes. These would be disruptive in nature. A good example is the transition of talents from mere employees to on-demand professionals, blurring the line between employment and outsourcing. Many of our SMEs are simply not ready to handle this rapid transition – but it’s a change that we need as a country, no matter how painful”.

Table 1: SME100 in Brief

Table 2: SME100 2016 Winners by Industry