Hong Leong Industries Bhd (HLI) is positioning itself for continued growth by expanding its Yamaha Genuine spare parts business and higher-margin big-bike segment, despite increasing competition from Chinese motorcycle manufacturers in Malaysia. The company’s efforts are supported by strong brand loyalty and strategic initiatives aimed at boosting market share and profitability.

Following a record profit year, market analysts at Kenanga Research highlighted HLI’s ability to maintain volume and revenue growth amid the expanding presence of Chinese competitors. The spare parts division, which currently generates approximately RM200 million in revenue, is viewed as a pivotal driver for long-term earnings sustainability. As part of its growth strategy, HLI plans to launch a second Yamaha Genuine Parts brand, catering to price-conscious consumers with a value-for-money offering. This move targets a Malaysian motorcycle spare parts market estimated to be worth between RM2 billion and RM3 billion annually, where non-genuine and aftermarket parts currently occupy a significant share.

“We believe even modest gains in market penetration could provide meaningful growth prospects for HLI’s spare parts business,” Kenanga Research said.

In parallel, HLI aims to grow its big-bike segment, which holds a 25% share of the Malaysian market and currently achieves roughly RM300 million in revenue. The company intends to expand this to RM500 million within the next two to three years by initially focusing on completely built-up imports for smaller volume niche models, while pursuing localization for high-volume, top-selling models through completely knocked-down (CKD) assembly. HLI expects to introduce between 15 and 17 new models during this period, with competitive pricing aligned to target markets.

Additionally, HLI plans to enhance customer engagement through a digital loyalty reward platform, slated to launch by the end of 2026, which is expected to strengthen brand loyalty and help maintain market share amid competitive pressures.

While Chinese manufacturers have aggressively expanded in Malaysia, analysts note that demand for these brands is primarily driven by price-sensitive buyers. A significant segment of consumers continues to prefer Yamaha motorcycles due to their reputation for quality, reliable after-sales support, and strong resale value.

Beyond its core motorcycle business, HLI’s tiles division, operated under Guocera, is also expected to see improved profitability. The company is increasing its manufacturing capacity and expanding into large-format porcelain slabs, which offer higher selling prices and better margins. This move aims to bolster Guocera’s position in the premium building materials segment, with large-format tiles targeted to account for around 25% of division sales within three years. Currently, the tiles segment generates between RM220 million and RM250 million annually.

Kenanga Research noted that the expansion plans for Guocera are designed to add value for a potential future divestment, especially as the division had been vulnerable to rising operating costs. The research house maintained an "outperform" rating on HLI, with a target price of RM21, citing the company’s strong cash position of RM2.1 billion and its strategic alignment with the growing gig economy and leadership in the Malaysian motorcycle market.