HK listing a boon for S'pore-based automotive service provider
Hong Kong
SINGAPORE-based automotive service provider MBM Wheelpower has come a long way since its humble beginnings in 2001, and is now benefiting from last year's listing in Hong Kong, said company founder and chief executive Kelvin Lim.
MBM Wheelpower first started out with just three staffers and two car servicing work bays back in 2001, led by Mr Lim, a Singaporean who left a job as an automotive technician to found the company.
Today, MBM Wheelpower is listed on the Hong Kong stock exchange's Growth Enterprise Market under the group Zheng Li Holdings Limited, and has a headcount of 100 providing more than 30 automobile services across two centres in Singapore totalling 50,000 sq ft.
These include the new MBM Autocity Service Centre in Sin Ming Drive that was launched at the end of September. It has specialised mechanical and diagnostic tools, including the company's Car-O-Liner Collision Repair System that can deliver structural repairs and restore damaged vehicles.
"After coming out of Cycle and Carriage to start MBM Wheelpower in 2001, my aim was to offer customers the same quality of automobile maintenance service as the authorised dealers, while at the same time offering flexibility and competitive pricing," Mr Lim, Zheng Li's chairman and CEO, told The Business Times. "In particular, there was a demand for premium services from customers with luxury and ultra-luxury cars."
By listing in Hong Kong last November, Zheng Li garnered net proceeds of approximately HK$24.6 million (S$4.3 million) which are being used to enhance servicing capacity, market reputation and service quality, as well as to strengthen the brand, boost operational efficiency and sales and marketing, he said.
"Hong Kong's stock exchange was our natural choice given the level of internationalism, maturity in the global financial world and the amount of institutional capital and funds following listed companies.
"Listing in Hong Kong allowed Zheng Li Holdings Limited a platform to access the capital markets for future secondary fund-raising."
According to the group's 2017 interim financial report, it recorded a profit of S$213,000 for the six months ending June 30, 2017, compared to a loss of approximately S$1.5 million in the same period last year that was "mainly due to the non-recurring expenses related to the listing".
But it has not all been smooth sailing for Zheng Li, which has a market capitalisation of HK$950 million.
The report noted that for this year, market conditions in Singapore for the automobile industry "will continue to be challenging due to an expected fall in number of registered vehicles".
The group's stock price also began a slide in mid-September, dropping to a record low of HK$1.87 last week, far below its highest of HK$11.94 in early September and its initial November 2016 price of HK$4.76.
As at end Friday, there were signs of a possible recovery as the price ticked up to HK$2.39.
Mr Lim said "market forces could have been an influencing factor" and that he was "unable to tell for sure what caused the slide".
He hopes to develop automotive insurance as a "key business strategy". Zheng Li is in talks with "certain insurance companies on the appointment as their authorised service provider".
Mr Lim said: "MBM Wheelpower will continue to focus and maintain our leading position in the Singapore market. Nevertheless, we are open to opportunities to expand our product and service offerings based on the changing consumer trends and demands, in both Singapore and other regional Asian markets."
