Hong Leong Industries Bhd’s (HLI) share price has doubled to RM9.10 between April 1, 2014, and March 31, 2017. This is certainly a big boost for the company, which has a market capitalisation of over RM1 billion.

The upward momentum continued with the stock climbing to RM10.42 in late July before retreating to RM9.59 on Aug 19.

In hindsight, investors can certainly say HLI was a steal at around RM4 in late 2014 after its capital reduction exercise and the injection of its cement business into its sister company, Hume Industries Bhd (formerly furniture maker Narra Industries Bhd).

However, the pertinent question then was: What is left in HLI to drive future growth after it has distributed its stake in semiconductor manufacturer Malaysia Pacific Industries Bhd in 2010 and now hiving off its cement operation?

Nevertheless, HLI did not disappoint its shareholders. The group has maintained its earnings growth by making inroads into the massive Vietnamese motorcycle market. Those who have travelled to Vietnam would have certainly noticed that the motorcycle is a popular mode of transport there, especially in the cities.

The venture is now a key earnings growth driver, helped by the country’s economic boom.

So, it may not be an exaggeration to say that HLI is one of the Malaysian companies that have succeeded in their ventures in Vietnam.

Apart from the share price rally, HLI’s shareholders have also been rewarded with generous dividends. In its financial year ended June 30, 2016 (FY2016), the company declared a bumper dividend of 42 sen per share, thanks to a sharp increase in its earnings. In FY2014 and FY2015, it paid out 24 sen and 29 sen respectively.

The company could afford to be generous because it had a cash-rich balance sheet. Its cash position stood at RM424.3 million after taking into account short-term loans of RM113.12 million as at June 30, 2017.

In addition, its earnings are growing. Its earnings per share jumped to 80.16 sen in FY2016 from 56.18 sen the year before.

HLI’s net profit ballooned 43% year on year to RM247.22 million in FY2016. This was attributed to higher sales of Yamaha products in Vietnam by its associate company, Yamaha Vietnam Co Ltd. The earnings increment more than offset the slowdown in the building material division.

Between FY2013 and FY2016, HLI’s after-tax profit has expanded from RM148 million to RM247 million. This translates into a compound annual growth rate of 19%.

In FY2016, the company saw its share of profit from associates (net of tax) swell to RM102.5 million, compared with RM41.32 million in FY2015 and RM37.5 million in FY2014.

HLI has two core businesses — the manufacture of ceramic tiles and building materials under the “Hume” brand, and the manufacture and trading of Yamaha motorcycles in Malaysia and Vietnam.

Currently, the group’s motorcycle manufacturing division contributes 76% to its revenue.

Looking ahead, FY2017 is fast becoming an interesting year. For its nine months ended March 31, 2017 (9MFY2017), HLI achieved a 17% y-o-y increase in net profit to RM207.66 million.

Its stellar performance in Vietnam is driven by the country’s growing population and rapid economic expansion — it is one of the fastest-growing emerging markets in the world. In addition, its central bank cut its refinance interest rates in July for the first time in three years, thus encouraging consumers to spend. All in all, HLI is on course for a fourth consecutive year of revenue growth and fifth consecutive year of net profit growth.