AS Malaysia is still some way from developing its own bus rapid transit (BRT) system and implementing the use of environment-friendly electric buses, Johor-based bus manufacturer Gemilang International Ltd (GML) has been looking abroad, especially at the electric vehicle (EV) market in advanced nations.
In the last five years, the Hong Kong-listed company has carved a niche for itself as one of the pioneering manufacturers of aluminium and electric buses using Swiss-based technology in Asia-Pacific.
“Our competitors are foreign bus manufacturers and our competitive advantage is our long-term relationship with international chassis suppliers such as Mercedes, Scania, Volvo, MAN and CRRC, and experience in providing aluminium bus bodies and superstructures for them,” Gemilang chairman and CEO Pang Chong Yong tells The Edge in a virtual interview.
Gemilang’s other competitive edge is its pricing as its buses are about 10% to 20% cheaper than European brands.
“We are able to keep pricing and quality competitive as we manufacture in Malaysia using European technology. Our location also allows us to fulfil delivery requirements within six months to a year,” says Pang, 61, who is the co-founder and controlling shareholder of Gemilang with a 32.65% stake.
Vying for prominent role in IMBRT project
Gemilang’s experience in supplying EVs overseas has put it in a good position for the Iskandar Malaysia Bus Rapid Transit (IMBRT) project, where it is showcasing its electric bus prototype with its partner, Johor-based construction outfit JBB Builders (M) Sdn Bhd.
“By participating in the tender as a team, we hope to eventually be able to provide a turnkey solution for the IMBRT project,” says Pang.
Currently, the IMBRT project comprises four key areas of development — infrastructure construction, the supply of buses, the software and hardware for the BRT system, as well as daily operations and management.
Three out of the six bus prototypes submitted by various parties participating in the pilot testing programme use Gemilang’s main product — its full-aluminium bus body system — keeping Gemilang’s foot in the door.
Notably, Gemilang has been supplying aluminium buses for Go KL, Rapid KL, Rapid Penang and MRT feeder buses in the last 13 years.
The total value of IMBRT has yet to be made known as the government is still finalising the entire scope of the project.
“IMBRT director Rudyanto Azhar has said that the project is currently valued at more than RM1 billion. Our exact ‘share’, if awarded in the deal, has yet to be ascertained as the tender is not yet out. According to him, the tender and construction is expected to start this year and operations in 2023,” says Pang.
Currently, Gemilang exports aluminium and EV buses to 20 countries.
“We are currently focusing on the Australian, US and Singaporean markets, which are pushing for more EV buses,” Pang says.
He points out that Gemilang has been delivering a “considerable number of buses to Hong Kong and Macau”, where it has gained a healthy share of the market. As for China, Gemilang is making inroads by working with Chinese chassis suppliers CRRC Corp Ltd and BYD Auto Co Ltd.
In the financial year ended Oct 31, 2020 (FY2020), Gemilang saw its net profit decline 88.7% to US$417,000 from US$3.7 million in the previous year. Its revenue more than halved to US$31.15 million from US$63.16 million the year before.
Pang attributes the weak financial performance to shipment delays caused by the Covid-19 pandemic, as the company could not capture the revenue of ready-to-ship orders that had yet to be delivered. “As lockdowns and movement restrictions have caused delays in delivery, we are now focusing on our operations to fulfil the remaining orders from 2020 and current orders,” he says.
In spite of the shipment delays it is facing, Pang insists that the company’s order pipeline remains strong.
“We have outstanding orders from 2020 to fulfil and we have filled our order book for 2021. There are even advance orders for 2022. Our filled order book comprises orders from various countries, domestically and internationally, that is the US, Singapore, Hong Kong and Australia,” he says, adding that there had not been any cancellation of orders so far.
While Pang declined to reveal Gemilang’s revenue target for the year, he says the company’s order book is full, thanks to an increase in bus orders, particularly for electric buses for FY2021, which have almost tripled since last year.
Speaking on the bus maker’s long-term prospects in Malaysia, Pang says EV technology will continue to develop and mature in tandem with the rise of social and environmental awareness.
He points out that alternative transportation solutions such as trains require large infrastructure investments, and as such, populous nations with heavy traffic congestion like China and Indonesia will eventually reduce their reliance on cars and adopt leaner transportation solutions such as the BRT.
Since going public on the Hong Kong Stock Exchange in November 2016, Gemilang has been leveraging the East Asian bourse as a platform to raise its profile on the international market, as well as penetrate markets in the region.
Its initial public offering, which was oversubscribed by 26 times, raised HK$80 million. Its shares were valued at a price-earnings ratio of 7.9 times based on the offer price of HK$1.28.
Since hitting a peak of HK$1.07 on Oct 6 last year, Gemilang’s share price has fallen 27% to close at HK$0.79 last Friday, giving it a market capitalisation of HK$198.56 million. It has proposed a final dividend of HK$0.01 per share as well as a special dividend of HK$0.04 per share for FY2020.