Heptamax International’s Subsidiary Forms Strategic Joint Venture in Malaysia: Shareholder Implications and Growth Prospects

Key Highlights

• Heptamax International’s wholly-owned subsidiary, Heptamax International (M) Sdn. Bhd., has entered into a joint venture agreement (JVA) with industry experts to establish a new JV Company in Malaysia.
• The JV Company will focus on automation solutions, integrated trading, and corporate advisory, marking a significant move into new business segments.
• Heptamax International (M) Sdn. Bhd. will hold a controlling 51% stake in the new entity.
• Key Group executives (Mr. Tan Wai Hong and Mr. Phan Lick Hong) and external expert Mr. Lum Chee Seng will also be shareholders.
• Stringent governance, board control, and exit provisions are built into the JV structure, protecting shareholder interests.
• The venture operationalizes Heptamax’s approved diversification strategy, potentially impacting future share value and earnings sustainability.

Strategic Details of the Joint Venture

Heptamax International Limited has officially announced the signing of a joint venture agreement (JVA) by its wholly-owned Malaysian subsidiary, Heptamax International (M) Sdn. Bhd., with three partners: Mr. Lum Chee Seng (an industry veteran with deep networks in automation, robotics, and international trading), Mr. Tan Wai Hong (the Company’s Executive Director), and Mr. Phan Lick Hong (the Group’s Senior Technical and Product Development Manager). This collaboration is set to launch a new JV Company in Malaysia within 45 days.

JV Company Structure

• The JV Company will be incorporated as a private limited company with an initial issued share capital of RM100,000, divided as follows:
  • Subsidiary (Heptamax International (M) Sdn. Bhd.): 51,000 shares (51%)
  • Mr. Tan Wai Hong: 25,000 shares (24%)
  • Mr. Lum Chee Seng: 19,000 shares (20%)
  • Mr. Phan Lick Hong: 5,000 shares (5%)
• Mr. Tan, through direct and indirect holdings, will have an aggregate interest of approximately 28.87% in the JV Company.
• Shareholding by Mr. Tan, Mr. Lum, and Mr. Phan is conditional on continued employment with the Group or JV Company, ensuring long-term commitment.

Business Scope and Strategic Intent

• The JV Company will target three core business segments:
  • Development, implementation, and investment in automation solutions and related entities
  • Integrated import/export trading (systems and hardware procurement)
  • Strategic planning, corporate advisory, and management consulting
• Mr. Lum’s extensive network and expertise in automation and supply chain management will be leveraged to drive growth.

Governance & Control Provisions

• JV Board will comprise up to three directors: two nominated by the Subsidiary and one by the minority shareholders. Subsidiary appoints the Chairman (with casting vote) and the Managing Director (first holder: Mr. Lum).
• Major decisions (change of business, share issuance, asset disposal, major borrowings, or related party transactions) require Subsidiary’s prior written consent.
• Customary pre-emption, tag-along, and drag-along rights protect minority and controlling shareholder interests.
• The Subsidiary has a call option to acquire minority shares at any time at a price set by independent valuation.
• Non-competition and exclusivity provisions bind all parties for up to three years post-exit, ensuring JV focus and operational integrity.

Shareholder Impact and Price Sensitivity

• This JV marks Heptamax’s formal entry into new business segments, as approved at the August 2025 EGM, signaling strategic diversification and reduced reliance on its legacy revenue stream.
• Given the automation and trading focus, the JV may unlock new, high-growth markets, enhance group earnings, and drive long-term sustainability.
• Executive and technical management stakeholding aligns interests and increases entrepreneurial commitment, potentially accelerating execution and market penetration.
• Financial impact for FY2025 is expected to be immaterial at this stage (RM51,000 funding from internal resources), but future upside could be significant as the JV scales.
• The Audit Committee affirms the JV’s risk/reward profile is proportionate and not prejudicial to minority shareholders, a key reassurance for investor confidence.

Investor Actionables and Next Steps

• A copy of the JVA is available for inspection for three months at the Company’s Singapore office, with prior email appointment required.
• The Company will issue further announcements on material developments—investors are advised to monitor updates closely for potential price-moving news.
• Shareholders are recommended to consult professional advisers regarding any implications for their holdings or investment strategies.

Conclusion

The launch of this joint venture is a potentially transformative event for Heptamax International Limited, representing a strategic expansion into automation and trading sectors which could drive long-term growth and value creation. The robust governance, alignment of management incentives, and strong operational plans suggest a material shift in the Group’s business scope. Investors should view this as a signal of Heptamax’s proactive diversification and readiness to capitalize on emerging technology opportunities in Malaysia and the broader region.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors are urged to conduct their own due diligence and consult licensed financial advisers prior to making investment decisions. The information herein is based on company disclosures as of 2 October 2025 and may be subject to change.