Ingress may list in Thailand

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INGRESS CORP BHD, which was privatised and its securities removed from Bursa Malaysia in the middle of last year, could be seeking a listing on the Stock Exchange of Thailand (SET), sources familiar with the company tell The Edge.

Details are scarce and neither the company’s executive vice-chairman and executive director Datuk Rameli Musa nor his executives could be reached for comment. 

A few weeks ago, an official of the company confirmed that there was a plan to float Ingress’ shares on the SET but he declined to say more.

“Yes [there is such a plan], but we have yet to appoint the merchant bankers … I can let you know more in about two weeks,” the official said, speaking on condition of anonymity. 

He declined to comment when asked if the plan entailed a listing of Ingress’ Thailand-based business or the entire company, including its Malaysian, Indonesian and Indian units.

The official has since been unreachable. 

Nevertheless, Ingress’ move would mark the first time a company privatised in Malaysia sought a listing in Thailand. 

Commenting on this, an analyst with a bank-backed brokerage firm, who covers the automotive industry, says valuations for car companies in Thailand are better than in Malaysia. “In Malaysia, car part companies trade at price-earnings multiples of only seven to eight times. APM [Automotive Bhd], for instance, trades at eight times. Thai car part companies average 11 times, which would be much better for Ingress.

“We also trade at a 30% to 40% discount and with Thailand being the export hub for big Japanese car corporations, a listing there will fast-track Ingress’ reputational build-up.” 

In a nutshell, he considers the move a good one. 

Perhaps, one of the reasons for Ingress’ privatisation last year was its low valuations. Ingress was taken private at RM1.85, which was considered low compared with its net assets per share of about RM2.77. 

“They [Ingress’ management] privatised it by paying two-thirds of its net asset value … that should tell you how frustrated they were,” another analyst who covers the automotive sector says.

However, it has to be noted that the company’s high net asset value per share could be due to its tools, moulds, dies and other dedicated equipment and buildings, some of which do not have any commercial value.

An executive with a large automotive company, who is familiar with Ingress’ plan and feels it is logical, says, “It’s not so much the valuations … Rayong is the Detroit of the East, the automobile hub for this part of the world, so a lot of Ingress’ parts are already being sold in Thailand. The Thai government is also giving good incentives to companies to invest there.”

Ingress’ main businesses are automobile component manufacturing, automotive dealership (BMW) and a 30% stake in Balfour Beatty Rail Sdn Bhd in partnership with European giant Balfour Beatty.

In Thailand, it wholly owns Fine Components (Thailand) Co Ltd and has 62.5% equity interest in Ingress Autoventures Co Ltd.

Details, such as the size of the initial public offering, are not available as the actual assets to be listed are not known. Nevertheless, a check with the Companies Commission of Malaysia reveals that in its financial year 2014 ended Jan 31, Ingress registered an after-tax profit of RM19.9 million on revenue of RM848.3 million. Some RM4.4 million was paid out as dividends.

As at Jan 31, Ingress had non-current assets of RM431 million while its current assets stood at RM269.2 million. On the other side of the balance sheet, short-term debt commitments stood at RM251.5 million while long-term borrowings amounted to RM112.6 million.

On CCM, the shareholder of Ingress is stated as Maybank Nominees, which would indicate that the company’s shares have been pledged to the bank. Ingress had obtained borrowings of RM110 million from Maybank Investment Bank Bhd for the privatisation exercise. 

To recap, the privatisation, which was announced in April last year, was undertaken by Ramdawi Sdn Bhd, the vehicle of Rameli and Datuk Ab Wahab Ismail, at RM1.85 apiece with Maybank IB advising on the deal. 

A CCM search reveals that Ingress’ directors are Rameli and Ab Wahab, who were involved in the privatisation, and Shamsudin @ Samad Kasim, Zulkifly @ Ibrahim Ab Rahman, Mohamad Hassan, Datuk Vaseehar Hassan Abdul Razack, Abdul Khudus Mohd Naaim, Affandi Mokhtar and Abdul Rahim Hitam. This is largely the old management team of Ingress.


This article first appeared in The Edge Malaysia Weekly, on September 22-28, 2014.