If you’ve ever taken a bus from Johor Bahru, Malaysia, to Singapore — whether for a visit or work—you’ve likely encountered the “Causeway Link” bus. Recently, the company behind this service, HI Mobility Berhad, has made headlines by launching its IPO listing.
Tell you a secret, the major shareholder of HI Mobility is also a substantial shareholder for Yinson Holdings Berhad.
Business Breakdown: What Does HI Mobility Do?
HI Mobility Berhad (“HI Mobility”) primarily focuses on investment holding, while its wholly-owned subsidiary, Handal Indah, specializes in providing bus transportation services. It serves key markets in Peninsular Malaysia and Singapore, with its headquarters and main operational facilities located in Johor Bahru, alongside additional depots and facilities spread across Johor, Melaka, the Klang Valley, and Singapore.
The Company operates in the mass transit sector, providing cross-border bus services between Johor Bahru and Singapore, intracity routes in Johor, Melaka, and the Klang Valley, and intercity travel across cities and states. It also offers chartered bus services for corporations, along with repair, maintenance, and advertising space rental. The Company’s operations supported by 683 buses and four depots as of the LPD. Since 2023, it has deployed 53 electric buses to promote green mobility and sustainability.
The Company’s revenue is generated based on where passengers purchase their tickets or use payment methods like the ManjaLink card, credit cards, or bank cards to tap on when boarding the buses.
The Basics: IPO Details & Key Dates
When it comes to IPO, the dates are common and must see.
- Listing on: Bursa Malaysia’s Main Market
- IPO Price: RM 1.22 / share
- Market Cap: RM 610 million (based on the enlarged share base)
- PE Ratio: 18.4x (FY24 earnings)
Mark your calendars! The IPO opens on March 7, 2025, and closes on March 19, 2025. Balloting’s happening on March 21, and the listing date is set for March 28.
Where’s the Money Going?
One of the first things to check in any IPO is how they plan to use the funds. Here’s the breakdown for HI Mobility:
- Bus fleet expansion and electrification: RM 70 million (60.4%)
- Expansion of electric vehicle (“EV”) charging infrastructure: RM 15 million (12.9%)
- Technological enhancement: RM 5 million (4.4%)
- Working capital: RM 17.9 million (15.4%)
- Estimated listing expenses: RM 8 million (6.9%)
Financials: Revenue Growth & Margins
Next, let’s look at HI Mobility’s financials.
- Revenue: HI Mobility’s revenue posted RM 207.71 million in FYE2024, compared to RM 119.63 million in FYE2023 increased by RM 88.08 million or 73.63%. In overall, revenue of the group grew significantly since FYE2022, CAGR achieved 156.9%.
- Gross Profit Margin (GPM): HI Mobility’s gross profit margin achieved 30.5% in FYE2024 which higher than 27.5% in FYE2023.
- Net Profit Margin (NPM): Net profit margin for HI Mobility achieved 16% in FYE2024, down a little from 16.3% in FYE2023.
Balance Sheet: Financial Health at a Glance
Since HI Mobility will not utilize the IPO funds to repay borrowing although the borrowing has spike up for the past few years for capital expenditures and working capital purposes. Let us zoom into the balance sheet and look at the figure.
- Long-Term & Short-Term Borrowings (Term Loans, Trade Financing & Hire Purchase Liabilities): As of October 31, 2024, HI Mobility’s total borrowing stood at RM 151.8 million, with RM 36.7 million due within a year and RM 115.1 million payable later. Its gearing ratio was 1.2, a figure that has been declining since January 31, 2022, though a significant drop in business volume could still pose a default risk. To expand its bus fleet, depots, and digital infrastructure, the Company plans to use IPO proceeds, internal funds, and/or bank borrowings, which may raise the gearing ratio as if the new loans are utilized.
- Total Liabilities / Total Assets: As of October 31, 2024, HI Mobility’s total liabilities over total assets stood at around 63%.
- Cash and Bank Balances: As of October 31, 2024, HI Mobility’s cash and bank balances stood at RM 44.5 mil, which is 13.4% of total assets and 29% of total borrowings.
Conclusion
HI Mobility Berhad’s IPO on Bursa Malaysia’s Main Market, priced at RM 1.22 per share with a RM 610 million market cap, offers investors a stake in a fast-growing mass transit provider with a strong sustainability focus, evidenced by its 73.63% revenue jump to RM 207.71 million in FYE2024 and a 156.9% CAGR since FYE2022, alongside the deployment of 53 electric buses since 2023.
The company plans to allocate 60.4% of the RM 115.9 million in proceeds to fleet expansion and electrification, with additional funds enhancing EV infrastructure, technology, and working capital, though its gearing ratio of 1.2 and RM 151.8 million in borrowings as of October 31, 2024, signal moderate financial risk despite a solid 30.5% gross profit margin and RM 44.5 million in cash reserves.
Set to list on March 28, 2025, HI Mobility balances promising growth in green mobility with the challenges of managing a leveraged balance sheet, making it an intriguing yet cautious investment opportunity. Yet, if the management can sustain consistent growth and positive cash flow, the expansion initiatives are poised to drive increased revenue and profitability moving forward, potentially reducing the gearing ratio over time.