Up over 30% on LEAP debut, Matrix Parking eyes more buys

This article first appeared in The Edge Financial Daily, on June 11, 2019.

Chin is upbeat about the parking facility management services industry’s outlook in Malaysia. Photo by Sam Fong

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KUALA LUMPUR: Home-grown parking management services provider Matrix Parking Solution Holdings Bhd shares jumped 30.77% when it debuted on the Leading Entrepreneur Accelerator Platform (LEAP) Market yesterday.

The stock started the day at 15.5 sen, up 2.5 sen or 19.23% over its initial public offering (IPO) price of 13 sen. At the closing bell, it settled at 17 sen, four sen or 30.77% higher, after 880,600 shares changed hands.

With a market value of RM34 million, Matrix Parking is the first parking management services company listed in Malaysia. It aims to grow its revenue base by acquiring more parking bays using the proceeds from its IPO.

“We intend to look for good opportunities to purchase [more parking facilities] and we are acquiring those which we think can generate good returns for us,” its co-founder and executive director Alex Chin Wing Wah told reporters after the company’s listing ceremony yesterday.

Of the total RM2.60 million raised from the IPO, Matrix Parking has allocated RM800,000 to partly finance its RM2.65 million purchase of 665 parking bays within 12 parcels of property in the basement and podium levels of Cova Square in Kota Damansara, Selangor; RM200,000 to acquire parking site equipment; RM900,000 for general working capital; and the remaining RM700,000 for estimated listing expenses.

The company is also planning to venture further into the parking management market in Johor Baru after successfully securing a lease arrangement for the parking facility in the state’s largest hospital.

“At the beginning of 2019, we ventured into Johor Baru and managed [to secure the parking management of] Hospital Sultanah Aminah, the biggest hospital in the state. We are now looking to penetrate Johor Baru [further],” said Chin, adding the hospital has about 2,000 parking bays, with good returns expected for the company in the long term.

Apart from acquiring more parking bays, the company plans to secure more contracts in its core markets in the Klang Valley. Matrix Parking’s revenue is derived from the management contract, lease arrangement and self-owned parking facility segments.

For a management contract, the company gets a base monthly fee from the property owner for managing a parking facility, and possibly an incentive fee based on the facility’s performance. All revenue collections are deposited with the property owner.

Under the lease arrangement, the company collects revenue generated from a parking facility, then pays the fixed monthly rental fees and/or some percentage of parking facility revenue to the parking facility owner.

The company, meanwhile, only has one self-owned parking facility in Casa Residenza, also located in Kota Damansara.

For the cumulative eight months for the financial year ended Aug 31, 2018, Matrix Parking’s revenue increased 15.51% to RM6.20 million from RM5.36 million a year ago, mainly due to additional new parking sites secured. Its net profit rose 51.43% to RM809,445 from RM534,545.

Chin, upbeat about the parking facility management services industry’s outlook in Malaysia, added that Matrix Parking intends to adopt a dividend policy of at least 30% of its audited profit after tax.