Petronas most valuable Malaysian brand with value of RM7b

Followings news was picked from The Edge Daily dated 25-09-2007. Well done Malaysia! Proub to be Malaysian.


KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) is the country’s most valuable brand based on a report on Malaysia’s Top 50 Most Valuable Brands by London-based Brand Finance Institute.

The leading independent brand valuation firm said Petronas, which is also ranked among Fortune Global 500’s largest corporations in the world, has a brand value of US$2.1 billion (RM7.3 billion), making it the most valuable out of 50 household brands of various industries in Malaysia.

Malayan Banking Bhd (Maybank) came in second with brand value of US$1.6 billion (RM5.6 billion). Companies that made it to the top 10 list, were Telekom Malaysia Bhd (TM), Genting Bhd, Bumiputra-Commerce Holdings Bhd (BCHB), Tenaga Nasional Bhd, Maxis Communications Bhd, Public Bank Bhd, Sime Darby Bhd and Malaysian Airline System Bhd. (see chart)

The banking industry was the most highly represented, with Maybank, BCHB and Public Bank in second, fifth and eighth placing, respectively.

Brand Finance said the rankings were compiled using publicly available information on market share, market growth and company financials with data from Bloomberg, annual reports and press releases.

Its brand valuation was conducted using “royalty relief”, based on the assumption that the company was not owning its own brand, but was required to pay royalty fees to operate from a third party.



The present value of the hypothetical stream of royalty fees would represent the brand value, it said.

It said the released rankings would provide an overview of the methodologies for measuring brand equity from customer perspective, and measure how it would translate into superior business value.

In the 17-page report, Brand Finance said the growth of Asian companies had been driven by manufacturing and capital-intensive industries but was slowly shifting towards service-oriented ones as the region’s economics began to develop and mature.

It said investors recognised that productive resources of these companies were increasingly represented by assets that did not appear in financial statements such as patents, supply chain systems, distribution rights, skilled workers and brands.

Additionally, recent changes in the accounting standards for business acquisitions had reinforced the importance of understanding intangible assets that accounted for an increasingly large proportion of business value, it said.

According to the International Financial Accounting Standards 3 that was implemented in March 2004, goodwill on intangible assets was no longer reported as excess of purchase price over the acquisition of tangible assets.

Instead, goodwill will be allocated to five classes of intangible assets. (see chart above).

Brand Finance said the recognition of intangible value in the country, however, was low compared with other countries as only 40% of Malaysia’s market value was derived from intangible assets against the US whose market was derived from intangible assets was 70%.