Malaysian Lightning Protection Products Industry

Global Market Value & Growth

Market Value: MYR 3.5 billion ($800 million) in FY 2020.

Growth Rate: CAGR of 5%.

Malaysia:

High Lightning Discharges: Notable areas like Bayan Lepas (293 LDA) and Kuala Lumpur (280 LDA) experience high values of lightning days per annum (LDA).

Impact on Power Supply:

Power Outages: Over 70% of power outages in Malaysia are due to lightning, costing the nation over RM 250 million annually.

Lightning Frequency: Malaysia averages 100 to 140 lightning days and 600,000 to 1,300,000 lightning flashes per year.

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Industry Overview

The lightning protection systems industry is a sector of the construction and engineering industry that specializes in the design, installation, and maintenance of lightning protection systems for buildings, structures, and other installations. Some of the key products in this industry include air terminals, down conductors, grounding systems, and surge protection devices.

Market Dynamics

Vulnerability to Lightning: The increasing usage of electrical appliances and global warming have contributed to the increasing vulnerability to lightning activities.

Global Market Value: The global lightning protection technology (LPT) market was estimated to be valued at MYR 3.5 billion ($800 million) in FY 2020 with a compound annual growth rate (CAGR) of 5%.

Regional Insights: Malaysia

High Lightning Discharges: Malaysia experiences high lightning discharges with extremely high values of lightning days per annum (LDA), especially in high-risk areas such as Bayan Lepas (293 LDA) and Kuala Lumpur (280 LDA).

Power Outages: More than 70% of power outages in Malaysia are due to lightning, costing the nation over RM 250 million annually.

Lightning Frequency: Malaysia experienced an average of 100 to 140 days of lightning and between 600,000 to 1,300,000 lightning flashes per year.

Trading Comparables
(In MYR million, As on May 4, 2023)	Enterprise Value (EV)⁸	Revenue (TTM)	EBITDA (TTM)⁹	EV / Revenue	EV / EBITDA
Company	Enterprise Value (EV)⁸	Revenue (TTM)	EBITDA (TTM)⁹	EV / Revenue	EV / EBITDA
SLP Resources Berhad ⁴	314	165	31	1.9x	10.2x
Southern Cable Group Berhad ⁵	232	892	36	0.3x	6.4x
Globetronics Technology ⁶	575	180	71	3.2x	8.1x
Amlex Holdings ⁷	92	85	20	1.1x	4.7x
Chin Well Holdings ⁸	397	662	136	0.6x	2.9x
Success Transformer Corporation ⁹	171	231	37	0.7x	4.7x
Median				0.9x	5.5x

Porter's Five Forces

Threat of New Entrants - Low

This industry is capital-intensive and requires significant investment in research and development, specialized machinery, and skilled labor. This makes it difficult for new entrants to compete with established companies that have already invested heavily in these areas which made the threat of new entrants low.

Existing Competitive Rivalry - Moderate

There are a few established players in this industry. These companies engage in aggressive pricing and marketing strategies to gain market share. But most of them are agents or licensees. This makes the competitive rivalry moderate.

Threat of Substitutes - Low

The threat of substitutes in this industry is relatively low, as there are few alternative technologies that can replace lighting protection systems.

Bargaining Power of Customers - High

Buyers can easily switch suppliers, which puts pressure on manufacturers to offer competitive pricing and high-quality products. This makes the bargaining power of customers high.

Bargaining Power of Suppliers - Moderate

This industry relies heavily on a few key suppliers for raw materials. These suppliers have significant bargaining power, as there are few alternative sources for these materials. Any disruptions in the supply chain can have a significant impact on the industry.