Betamek will increase revenue through green vehicle expansion

KUALA LUMPUR: Electronics manufacturing service (EMS) provider Betamek Bhd aims to increase revenue by capitalizing on the need for increased use of electronics as the market for green vehicles continues to expand.

“Our future plans are to take advantage of new technologies as the automotive industry shifts towards hybrid and electric vehicles (EVs),” Megat Iskandar Hashim Ismail, chief executive of Betamek, told a news conference in online after the virtual launch of the group’s IPO. (IPO) prospectus yesterday.

“We see this trend continuing in the years to come. And as this happens, there is an increased need for more electronics in every vehicle.

Betamek’s plan is to take advantage of its position in the industry, grow the group and take advantage of available opportunities.

It also plans to use proceeds from the IPO to expand its research and development (R&D) activities, to enable it to offer a more diverse product line.

“By doing so, we hope to generate additional revenue streams with additional product lines and offer more unique solutions,” he added.

Betamek specializes in the design and development (D&D), as well as the sourcing and manufacturing of electronic components and custom components for the automotive industry.

The group is involved in the D&D and manufacturing of vehicle audio products and components, including infotainment systems and audio video accessories, as well as accessories such as climate control panels, USB chargers, power switches, mirrors, power outlets and reversing cameras, among others.

In a statement, Betamek chief executive Mirzan Mahathir said the group was in discussion with its technology partners to develop and introduce more innovative technologies and product solutions.

“Over the years, we have expanded our product portfolio to include new automotive electronic solutions and technologies.

“There are still many untapped opportunities for product segments related to advanced driver assistance systems, entertainment and connectivity, Internet of Things and vehicle accessories.

“This IPO exercise will be a big boost for our future R&D activities,” Mirzan added.

Regarding labor shortages in the manufacturing industry, Megat Iskandar pointed out that the group has a 100% Malaysian workforce.

“We are one of the few manufacturing companies in this industry with 100% experience in hiring local workers. We don’t have any labor issues,” he said.

Regarding supply chain issues, Megat Iskandar said the group has a history of delivering to customers without interruption.

“We have cultivated several local suppliers who continue to be on our list of approved suppliers, as well as our suppliers from Hong Kong, Taiwan, Japan and China,” he said.

“Even during this period of global raw material supply shortages, we have managed to manage the situation through close collaboration with our customers and the agility of our R&D team to seek out alternative components to replace those in short supply. “, he added.

Regarding the weakening of the ringgit against the US dollar, Betamek’s chief financial officer, Nor’ Azrin Nusi, said that the group’s foreign suppliers have agreed to trade in their respective currencies. “For example, the majority of our suppliers come from China. We spoke to them and they agreed to trade in yuan rather than US dollars,” he said.

Regarding Betamek’s earnings outlook, Nor’ Azrin pointed out that most of the group’s revenue comes from carmaker Perodua.

“We are confident that as long as Perodua delivers, so will we,” he said.

Betamek, on its way to listing on the ACE market on October 26, 2022, aims to raise RM33.8 million from the IPO, where the group will issue 67.5 million new shares, representing 15% of the share capital expanded to 50 sen per share.

Based on the expanded share capital of 450 million shares, Betamek is expected to have a market capitalization of RM225mil.

Of the 67.5 million new shares, 22.5 million will be for the Malaysian public by vote, 13.5 million for its directors, employees and eligible persons who have contributed to Betamek’s success, and the remaining 31.5 million for a private placement with selected investors.

In addition, Iskandar Holdings Sdn Bhd, owned by Mirzan, Betamek’s largest shareholder, will offer 45 million existing shares to selected investors via a private placement.

Betamek plans to use RM7mil (20.7%) to fund R&D and RM6.5mil (19.3%) to expand its R&D offices, raw material storage and ancillary facilities to accommodate future growth.

Another RM3mil (8.9%) will be used to acquire machinery and equipment for its Rawang plant to improve its efficiency and manufacturing capabilities.

The balance will be used to repay bank loans of RM10 million (29.6%), while RM3.9 million (11.4%) is for general working capital and the RM3.4 million remaining (10.1%) to cover registration fees.

The initial public offering is open for subscription until October 7, 2022.

M&A Securities Sdn Bhd is the advisor, sponsor, underwriter and placement agent for the IPO exercise.

Sallie R. Loera