Hong Leong Asia : Annual Report 2023

ABOUT US

Hong Leong Asia Ltd. ("HLA" or the "Group") is a diversified Asian multinational with core businesses in Building Materials and Powertrain Solutions1. Headquartered in Singapore with an operating network spanning Singapore, Malaysia and China, HLA was incorporated in Singapore on 30 August 1963, and listed on the mainboard of the Singapore Exchange (SGX: H22) since 1998.

The Group's industry-leading businesses comprise China Yuchai International Limited ("CYI" or "Yuchai") with its principal operating subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL") under the Powertrain Solutions portfolio, as well as Island Concrete (Private) Limited ("Island Concrete"), R3 Precast of HL Building Materials Pte. Ltd. ("HLBM") and Tasek Corporation Berhad ("Tasek") under the Building Materials portfolio. Collectively, the Group works closely with customers to develop and deliver innovative and sustainable solutions for cities of the future.

OUR PARENT COMPANY

Headquartered in Singapore, the Hong Leong Group2 is a globally-diversified company with gross assets of over S$40 billion in property investment and development, hotel ownership and management, financial services and industrial enterprises across Asia Pacific including China, the Middle East, Europe and North America.

• 1 Formerly known as diesel engines

• 2 Information as at 26 March 2024

CONTENTS

01	Corporate Profile	24	CEO's Operational Review	215	Analysis of Shareholdings
02	Our Vision and Core Values	28	Our Portfolio	217	5-Year Financial Summary
03	Financial Highlights	32	Investor Communications	218	Notice of Annual General Meeting
04	60 Transformational Years	36	Sustainability Board Statement	227	Additional Information on Directors
Seeking Re-election at the 63rd Annual
06	What We Do	40	Our Sustainability Highlights
General Meeting
08	How We Create Value	50	Corporate Directory
Proxy Form
12	Chairman's Message	52	Corporate Governance Report
Operating Network
16	Board of Directors	90	Financial Report
21	Management Team

CORPORATE PROFILE

POWERTRAIN SOLUTIONS

CYI, a subsidiary of HLA, is a Bermuda investment holding company established in 1993 and is listed on the New York Stock Exchange (NYSE:CYD). Its principal operating subsidiary, GYMCL, is one of the leading Powertrain Solutions manufacturers in China.

for each application. It also produces electrical powertrain solutions for new energy vehicles.

Based in Yulin City, Guangxi Zhuang Autonomous Region, GYMCL manufactures, assembles and sells a variety of light, medium and heavy-duty engines for trucks, buses, passenger vehicles, industrial and agriculture equipment, marine and power generation applications, as well as high-value core spare partsGYMCL has an extensive sales and distribution network in China and a presence in 18 other countries, with more than 3,000 service stations in domestic markets and globally. It's Research and Development Institute also holds a portfolio of over 3,000 patents and partnerships focused on energy efficiency, new energy components, high-power electrical systems as well as hybrid and alternate fuels engine technologies.

BUILDING MATERIALS

HLA's Building Materials portfolio is one of the longest-established integrated building materials businesses in Southeast Asia, with subsidiaries across the value chain from raw materials to cement, ready-mix concrete and precast.

and sale of cement, cement-related products and ready-mixed concrete in Peninsular Malaysia.

In Singapore, the Building Materials group of key companies ("BMG") comprising wholly-owned Island Concrete and HLBM, supplies all grades of ready-mixed concrete as well as precast concrete elements for the real estate and built environment sectors in Singapore.

To deliver sustainable growth and create long-term shareholder value, the Group actively seeks partnerships and investments synergistic to its Building Materials businesses. HLA currently holds effective equity stakes in:

• • Singapore Cement Manufacturing Company (Private) Limited (50% stake)

• • HL-Sunway JV Pte Ltd (51% stake)

  In Malaysia, Tasek, a subsidiary of HLA, is one of the largest integrated cement manufacturers, adding to the Group's Building Materials portfolio. Tasek's key business activities encompass the manufacturing

• • Cement Industries (Sabah) Sdn Bhd (29.48% stake)

• • BRC Asia Limited (20.15% stake)

To learn more, visitwww.hlasia.com.sg

OUR VISION

Established Asian multinational known for our Market Leadership and Financial Strength, working closely with our customers to Develop and Deliver Sustainable and Innovative Urban Solutions for cities of the future.

OUR

CORE VALUES

KEEP THE CUSTOMER FIRST

Stay ahead of our customers' need by constantly having our fingers on the market's pulse and ensuring our products and services exceed their expectations today and in the future

MIND THE DETAILS THAT MATTER

Sometimes, small things can make a big difference, so while we're growing quickly, let's make sure we continue to maintain our attention on things - big and small - that matter

DO THE RIGHT THINGS

Maintain the highest level of business ethics and take personal ownership to conduct ourselves in an honest and responsible manner in order to do what's right

THINK FAST, WORK FASTER

Let's make sure we take the time to think and plan, but also make sure we take decisive action to put our plans into action and drive our businesses forward

CREATE AN IMPACT BEYOND OUR

BUSINESS

Let's ensure our products and our actions as an organisation help nurture an inclusive society and contribute towards environmental sustainability

FINANCIAL
HIGHLIGHTS
REVENUE*	PROFIT BEFORE TAX*
(S$ million)	(S$ million)
2023	4,081	2023	166
2022	3,881	2022	124
2021	4,933	2021	132
2020	4,496	2020	195
2019	4,094	2019	200
ATTRIBUTABLE PROFIT	EARNINGS PER SHARE
(S$ million)	(cents)
2023	65	2023	8.7
2022	55	2022	7.3
2021	60	2021	8.0
2020	47	2020	6.3
2019	34	2019	4.6
DIVIDEND PER SHARE	REVENUE BY COUNTRY
(cents)	(S$ million)

HONG LEONG'S BEGINNINGS

60

The start of a Singapore pioneer's remarkable journey

1928

Hong Leong Group Founder, Mr Kwek Hong Png left his native China at age sixteen to build a better life. He worked hard in his brother-in-law's hardware business for 10 years and took English classes with the dream to start his own business.

1941

Uniting family to seed ambition

With a decade of savings, our Founder started his own business in a red, two-storey shophouse along Beach Road trading building materials and paint among other things. He invited his three brothers to join him from China and named the business after one of his brothers, "Hong Leong", which connotes how majestic mountains and oceans all have modest beginnings in the form of rocks and streams.

1942 - 1945

Opportunity knocks during businesses crumbled, tumultuous times

During the Japanese occupation, as other

Hong Leong used its large warehouse and resources to buy and house building materials for sale, allowing more capital to be generated to expand the business further. Hong Leong was hence, able to diversify and grow much faster than others.

Cementing long-lasting partnerships, riding on economic growth

In the 50s, Hong Leong partnered with Onoda Cement and Mitsui & Co., who were pioneers in Asia for building materials, and leveraged the partnerships to offer superior products, further growing the business through Singapore Cement Manufacturing Company ("SCMC"). This also led to new opportunities amidst a developing Singapore - acquiring land and expanding into consumer financing. During this period, Hong Leong also entered the Malaysia market, first establishing Tasek Cement Berhad, followed by setting up a Hong Leong Malaysia branch to expand its real estate and banking activities.

Era of urbanisation during Singapore's first decade

Island Concrete (Private) Limited was established, being the first ready-mix concrete supplier in Singapore. It's first commercial project was Tanglin Shopping Centre, followed by well-known infrastructure projects such as Singapore's Mass Rapid Transit System and Changi Airport Terminal 1 in the years to come.

After acquiring part of Hume Far East Group and renaming it Hong Leong Industries Manufacturing Limited ("HLIM"), in anticipation of the Housing Development Board's policy to incorporate more precast elements in Singapore's buildings, HLIM began to focus on precast production and was also successful in helping the construction industry with labour saving measures during a time of rising labour costs.

1950s - 1960s

1970s - 1980s

Hume Plastics (Malaysia) Limited (today known as Hong Leong

Asia) was incorporated in Singapore on 30 August 1963

TRANSFORMATIONAL YEARS

Hong Leong Group undergoes Transition

In a major restructuring exercise of the Group, Hong Leong Asia ("HLA") consolidated all the Building Materials businesses of Hong Leong Group and is listed on the Singapore Stock Exchange.

HLA became a substantial stakeholder of Tasek Corporation Berhad ("Tasek") (formally known as Tasek Cement Limited), a pioneer and major player of cement in Malaysia.

First Foray into China Mr Kwek Leng Peck led the group to acquire majority stake in Guangxi Yuchai Machinery Co., Ltd. ("GYMCL"), a Chinese diesel engine manufacturer listing it under China Yuchai International ("CYI") on the New York Stock Exchange.

Singapore modernises into an iconic island-city state beyond economic success

Island Concrete secured a contract to supply 1.2 million cubic metre of ready-mix concrete for the iconic Marina Bay Sands Integrated Resort.

HLA expanded Tasek's cement production capacity in Ipoh and soon after, established a ready-mix concrete business in Central Malaysia.

SCMC expanded its cement terminal operations with an added 24,000 tonne capacity to enable the storage of Portland Flyash Cement from its Japanese partners to provide the Singapore market with lower-carbon cement.

Embedding sustainability and innovation to transform

The Building Materials business under Singapore launched two state-of-the-art facilities under its precast and ready-mix concrete arms to enable greener, automated operations while Malaysia created a new subsidiary to co-process waste materials to be recycled and used in its products and operations.

MOBILITY SECTOR REMAINS CORE TO HLA AS CHINA EXPERIENCES EXPONENTIAL GROWTH

GYMCL set up its first research and development centre in Nanning, Guangxi, to develop and test new prototypes to manage national emission standards and deliver energy efficient solutions.

GYMCL and Rolls-Royce announced a Joint Venture to produce MTU engines at GYMCL's primary facility for the Chinese off-road market segment.

GYMCL set up its second research and development centre in Wuxi High Tech Zone to develop and test new prototypes to manage emission standards and deliver energy efficient products and fuel cell solutions.

POWERTRAIN SOLUTIONS

RAW MATERIALS (Steel and Metal Alloys)RAW MATERIALS (Metals, Plastic, Electrical Parts)

CASTING / FORGING

COMPONENT MANUFACTURINGMACHININGENGINE ASSEMBLY & TESTINGTRANSPORTATIONPRODUCTS

Truck

Bus / Passenger Coach

Industrial / Others

DISTRIBUTION

BUILDING MATERIALS

Cement Production

QUARRIESRAW MILLS / PREHEAT / KILNGRINDINGTRANSPORTATION

(Rail / Road)

PRODUCTS

Ready-mix concrete

Trading Aggregate/Cement

STORAGE AND/ OR PACKING

Cement

Precast concrete

DISTRIBUTION

HOW WE CREATE VALUE

WHAT SETS US APART

At HLA, we see an unparalleled opportunity to grow our businesses and create positive impact beyond our businesses.

Competitive advantages as a diversified Asian multinational with core expertise in Building Materials and Powertrain Solutions

Industry leader in pioneering and innovating sustainable urban solutions for cities and communities

Key strategic growth thrusts to achieve HLA's aspiration of becoming a provider of sustainable and innovative urban solutions for cities of the future.

OUR ASSETS

Diverse team of reliable, resilient and responsible employees providing urban solutions for various customer industries

Powertrain Solutions>3,000 patents>3,000 service stations in Chinese domestic markets and globallyR&D laboratoriesBuilding Materials22 batching plants in 15 locations across Singapore and Malaysia>300 concrete mixer trucks in

Singapore and MalaysiaCement plant in MalaysiaLimestone and granite quarries

People

Diversified workforce spanning Singapore, Malaysia and China