HI Mobility Berhad aims to raise approximately RM115.9 million through its IPO. The proceeds are allocated as follows:
The IPO is scheduled for March 28, 2025, amid favorable market conditions for the transportation sector.
Bus Fleet Expansion and Electrification: RM70 million (60.4%)
Expansion of Electric Vehicle Charging Infrastructure: RM15 million (12.9%)
Technological Enhancement: RM30.9 million (26.7%)
This allocation indicates a focus on growth and expansion, particularly in sustainable transportation solutions.
The IPO was oversubscribed by 6.57 times. Specifically, the Malaysian public portion received 4,010 applications for 75.74 million shares, while only 10 million shares were available. The Bumiputera portion had an oversubscription rate of 3.03 times, and the non-Bumiputera portion was oversubscribed by 10.12 times.
HI Mobility declared a first interim dividend of 2.22 sen on March 5, 2025. However, there is no explicit commitment to a fixed dividend policy in the prospectus.
The IPO involves 130 million shares, comprising 95 million new shares and 35 million existing shares, priced at RM1.22 per share. This results in a market capitalization of approximately RM610 million upon listing. Given the substantial oversubscription and strategic use of proceeds, the stock is likely to perform well on its first trading day.
The IPO includes private placements of 47.5 million shares to Bumiputera investors approved by MITI and 67.5 million shares to institutional and selected investors. All these shares have been fully subscribed.
Maybank Investment Bank Berhad serves as the Principal Adviser, Sole Placement Agent, and Sole Underwriter for the IPO. Maybank’s involvement suggests a positive outlook for the IPO’s performance on its debut.
HI Mobility, through its subsidiary Handal Indah Sdn Bhd, provides bus transportation services, including cross-border routes between Johor Bahru and Singapore. The company operates 683 buses across 124 routes in Malaysia and Singapore, focusing on the mass transit sector.
For the financial year ended January 31, 2025, HI Mobility reported a net profit of RM43.76 million and revenue of RM279.82 million. The company maintains a strong asset base and has been investing in electric buses since 2023.
HI Mobility is the sole Malaysian bus operator providing Johor Bahru-Singapore cross-border services, a significant competitive advantage in a high-demand market.
Key executives include CEO Lim Chern Chuen and non-executive director Bah Kim Lian.
The public transportation sector is shifting towards sustainability, with increasing adoption of electric vehicles. HI Mobility’s investment in electric buses aligns with this trend.
Malaysia’s economic growth and urbanization support increased demand for public transportation services.
The upcoming Rapid Transit System Link (RTS Link) between Johor Bahru and Singapore, expected to commence operations by early 2027, is anticipated to complement HI Mobility’s services by improving cross-border connectivity.
Given the company’s strategic initiatives and favorable industry trends, market conditions appear conducive to a successful IPO.
Potential risks include regulatory changes, economic downturns, and competition from other transportation modes.
Post-IPO, major shareholders include Lim Han Weng (54%) and Bah Kim Lian (6.5%). High promoter commitment is evident.
The IPO’s oversubscription by 6.57 times reflects strong investor interest, suggesting a favorable performance on the first day of listing.
HI Mobility Berhad’s IPO has garnered significant attention, evidenced by an oversubscription rate of 6.57 times. This high demand suggests strong investor confidence in the company’s growth prospects. Malacca Securities has assigned a fair value of RM1.57 per share, indicating a potential upside of approximately 28.7% from the IPO price of RM1.22. Given the strategic allocation of IPO proceeds towards fleet expansion and technological enhancements, coupled with the company’s established market position, subscribing to this IPO appears to be a promising opportunity. On the first day of trading, it is anticipated that the stock may trade strongly above the IPO price, potentially approaching or exceeding the RM1.57 fair value estimate.
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