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Richard Lo, 49, started Techcomp with just HK$50,000. Photo by Sim Kih

THIS YEAR is the 20th anniversary of Techcomp Holdings, which was founded by its current president-cum-CEO, Richard Lo. If there is one thing the folks at Techcomp will toast, it is that in its history – which encompassed good and bad times - Techcomp has never had a loss-making year.

Continuing its growth trajectory, the company recently reported sales and net profit for FY 07 to be US$65.8 million and US$6.0 million, respectively. That's up a handsome 20.0% and 38.2%, respectively, from the year before.

Techcomp started life when Richard was 29 and had a capital of just HK$50,000. He was a one-man operation working from the office of a kind friend.

Richard's first asset was a table which, for sentimental value, is still kept at Techcomp’s current headquarters in Hong Kong.

Techcomp was listed on the Singapore Exchange in 2004, and currently has a market capitalization of about S$70 million based on its recent share price of 45 cents. That translates into a value of about S$30 million for Richard’s 44% stake, a quantum jump from his initial HK$50,000 capital.

Techcomp’s business is just beginning to become better understood by the Singapore investment community. Some of the difficulty lies in the fact that Techcomp is the only SGX-listed company that manufactures and distributes scientific instruments.

Its customers are largely in China but it increasingly sells outside of China. In Singapore, its clients now include the universities and the pharmaceutical and food and beverage industries.


TECHCOMP 2003 2004 2005 2006 2007
Revenue (US$’000) 38,752 41,917 44,617 54,842 65,819
Net profit (US$’000) 2,991 3,667 3,687 4,350 6,011
Net profit margin 7.7% 8.7% 8.3% 7.9% 9.1%
EPS (US cents) 2.99 3.15 2.73 3.22 4.30



Young ambition

As far back as he can remember, Richard has always had high goals. “I don’t know why - maybe I was naïve – but when I was young, I strongly believed I would become a successful scientist and win a Nobel Prize,” said Richard in an interview with NextInsight in Singapore.

He added: “Other jobs looked too easy. And there are thousands of people doing those jobs. There are very few who can win the Nobel Prize.”
 
Richard was inspired after attending a public lecture by Professor Yang Chen Ning, winner of a Nobel Prize for physics. 

The professor was also the inspiration behind Richard’s choice of the course of studies later. Prof Yang had said that if he could start all over again, he would study biochemistry, given its vast potential applications.

But back in the late 1970s, biochemistry was a new field and graduates had few job opportunities in that field in Hong Kong. Richard's parents, who had 10 other children to mind, didn’t interfere when he chose biochemistry as his major at the Chinese University of Hong Kong.

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The Chinese University of HK, where Richard obtained his bachelor's and master's degrees.
 


Chemistry and Biology were his chosen minor subjects – instead of marketing and accounting, as were popular then. In fact, he was the first and only student with his subject combination.

“The heads of the three departments decided my combination was an impossible one. They thought that no one could cope with it as it was like majoring in three subjects. They rejected my application. I must have some sales talent because I convinced them to change their mind,” r
ecalled Richard with a laugh.

“But it was one of the biggest mistakes of my life! For four years, I had to study every minute of the day.”

In his final year, he sought a place in a Ph.D programme, but his professor advised him to work a few years first to give himself time to decide if he really wanted to be a scientist. 

“All my life, I had prepared to be a scientist. Now I didn’t know what to do. But according to scientific training, if you don’t know what to do, you experiment.”

So, after graduating in 1981, he tried out a variety of jobs. He became a teacher for six months (“horrible experience”), then sales engineer for a distributor of scientific instruments (“quite interesting”). Reflecting an inner interest in certain areas, he became a laboratory technician (“easy job”), and newspaper and magazine contributor (“was quite successful and even became famous”).

His articles which he wrote, part-time initially, over five years after he became a teacher, were on diverse topics such as military weapons (interest in them was heightened during the Falklands war between Britain and Argentina), mysteries that cannot be explained by science – and blackjack.

Much to his delight, a publisher compiled his articles on mysteries and blackjack into books.

Why blackjack? Richard had limited gambling experience as his parents forbade him and his siblings from gambling at any other time except during Chinese New Year. Richard understood the game was subject to the law of probabilities, which meant it could be studied and chances of winning increased.

He took trips to Macau's casinos on several weekends to test his theories. Along the way, he also came to realise that "
it is a foolish way to earn money. You have to concentrate and make a lot of effort to calculate the odds. Gambling, to me, should just be entertainment and for relaxation.”

After four years of working, he was still unsure about his choice of career. But he did feel his scientific passion wane, and decided to return to his university in 1985 for a MBA course instead.

For his thesis, he used a mathematical model to predict changes in stock market indices. When he later attached his thesis to his applications for jobs, he received very positive responses.

"I had offers from Merrill Lynch, Citicorp, Nomura - everyone. But I wasn’t sure how exciting it would be sitting in an office the whole day, staring at figures.”

An employer whom Richard had spent several months with as a MBA intern won out. He said: “Richard, if you join the financial field, you will be wasting your four years of intense university study and a few years of work experience - and you will start without any competitive advantage.”

He offered Richard a salary which was a few multiples what MBA graduates normally received. Richard had greatly impressed him  during his internship.

Richard joined Ekpac Limited to start up its division selling scientific instruments in China. He worked hard. “People thought I achieved miracles, starting the division from nothing to become a major supplier in the industry. There was no miracle – they didn’t know how hard I worked. It was 18 hours a day.”

But one goal he could not achieve in two years with Ekpac was to push his company into manufacturing accessories and consumables in China. Richard thought the opportunities were immense, so he quit to strike out on his own.

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Richard and family on vacation in France.


Starting Techcomp

That’s how Techcomp started in 1988 as a distributor of instruments, thriving on support from Richard's previous clients.

It didn’t take long for him to discover that not only is the manufacture of scientific equipment a highly sophisticated process but also the instruments have many international regulations to comply with. 

But it only meant that Techcomp could not start manufacturing soon. Only in 1994 did it start a manufacturing plant in China, and that has grown at a good clip.

Richard balances work and family. He now works 10 hours daily. He makes time to continue to nurture his intellectual interests by reading science fiction, Chinese literature, politics and economics.

Gambling is part of the way he celebrates Chinese New Year with his family. He also swims and puts aside time for his wife, a home-maker, and their daughter aged 17 and son, 14.

“My children are a priority. I am their driver, and their porter for whom they don’t need to pay tips. My daughter needs a walking ATM. But, well, I enjoy it,” he said.
 
On his regular business travels, he comes to Singapore where he says he enjoys pepper crab and fusion food not available in Hong Kong. 

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Richard with shareholders after this year's AGM at Suntec City. Photo by Sim Kih


He enjoys pursuing his ambition to grow Techcomp too. It has become an established distributor in China and owns a manufacturing plant that meets international standards. 

It sales has extended beyond China to the rest of Asia, and it manufactures for OEMs. In FY 07, three years after starting its rest-of-Asia foray, about 18% of sales came from outside of China.

Techcomp is now intent on extending its sales to other major markets through M&A. “Our ambition is to be one of the major global players in this industry,” said Richard, who owns a 43.63% per cent stake (67,631,000 shares) in Techcomp.

In recent times, a number of fund managers have become substantial shareholders too. On April 9, it was announced that Kabouter Management LLC (based in San Francisco) had become a substantial shareholder with a 5.087% stake (7,885,000 shares).

Last Dec 13, it was announced that Axix Asia Fund SPC owned a 5.02% stake (7,778,000 shares).

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TECHCOMP: Lively 2009 AGM 

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