August 9, 2008 - KUALA LUMPUR: Malaysian companies are undervaluing their intangible assets, according to a report by leading independent brand valuation consultancy Brand Finance.
The report “Malaysia’s Top 50 Most Valuable Brands” is a result of case studies on Malaysian brands in the five years leading to Dec 31, 2007.
According to Brand Finance Singapore managing director Lucy Gwee, in order for Malaysia to compete effectively in the global economy that was shifting rapidly towards knowledge-based activities, it had to step up efforts to recognise and invest in intangible assets.
“The global economic paradigm has shifted from one that values tangible assets to one that increasingly favours intangible assets. Developed economies are relying more on intangible assets to generate economic value,” she said.
She added that fast-developing economies like China and India were recognising the need for their companies to own and develop intellectual property.
“Malaysian companies/brands need to equip themselves with management know-how and pertinent skill sets,” Gwee added.
Currently, Malaysia is one of the five countries with the largest proportion of value made up of tangible net assets, along with South Korea, Croatia, Turkey and Japan.
According to the report, Malaysia is ranked 29th (43%) in the world for intangible assets’ contribution to enterprise value as compared with the US in the first spot where intangible assets make up 75% of enterprise value.
Intangible assets are classified as identifiable non-monetary assets without physical substance, such as brands, trademarks, franchise rights, patents, human capital, customer relationships and even goodwill.
“While our report clearly shows that Malaysian companies are undervaluing, under investing and under acknowledging their intangible assets, there is however a silver lining,” Gwee said at the introduction of the report yesterday.
She said total brand value of Malaysia’s top 50 brands had increased by 9% from RM59.1bil in 2006 to RM64.8bil in 2007.
The findings showed Petronas Group, at the top spot, as having the most valuable brand portfolio of listed Bursa Malaysia companies with a brand value of RM8.3bil.
Star Publications (M) Bhd sits on the 32nd spot with a brand value of RM343mil.
Adapted from thestar.com