KUALA LUMPUR: Mi Technovation Bhd’s (MiTB) proposed acquisition of a seven-storey industrial building in Singapore for S$103.9 million (RM331.8 million) is aimed at strengthening its capabilities to commercialise intelligent electric powertrain systems and autonomous driving platforms, New Straits Times reported.
Public Investment Bank (PublicInvest) views the proposed purchase of the KHL building through MiTB’s wholly owned subsidiary, Ohima International Pte Ltd, as a strategic long-term investment rather than a conventional property acquisition.
According to the research house, the facility will function as the global operational hub for MiTB’s Vehicle Technologies Business Unit (VTBU), enabling the group to prepare for anticipated demand for its next-generation mobility solutions.
MiTB currently has a potential order pipeline of more than 181 powertrain units, with an average selling price of US$40,000 per unit. The company is also in discussions for an additional 5,000 to 10,000 units, PublicInvest said in a research note.
Management is targeting deliveries of 45 to 55 powertrain systems this year, with 27 units already secured so far this year. PublicInvest expects VTBU to become the group’s main growth engine over the next five years, with significant sales orders likely to begin coming in next year.
The research house maintained its “Outperform” recommendation on MiTB, with a sum-of-the-parts-based target price of RM9.45.
The proposed acquisition will provide the company with approximately 10,348 square metres of gross floor area, significantly expanding its existing Singapore headquarters. MiTB currently operates from leased premises in Queenstown, covering a built-up area of around 568 square metres.
The VTBU also has manufacturing and research and development (R&D) facilities in Hangzhou, Xi’an and Chongqing in China, with a combined built-up area of approximately 10,809 square metres.
The new Singapore facility is expected to accommodate several key operations, including the group’s main data and computing centre, digital twin and artificial intelligence (AI) centre, product definition and strategy centre, global finance and legal centre, and customer experience facilities.
PublicInvest said bringing these functions together under one roof could improve coordination in product development, customer engagement, commercial operations and global support services.
Singapore was chosen because of its established role in shaping global autonomous driving standards and the supportive policies offered by its government, the research house added.
The acquisition will be funded primarily through bank borrowings, which will account for 74.5% of the purchase price. Proceeds from the listing of Mi Material Holding Ltd on the Singapore Exchange will contribute 24.5%, while the remaining 1% will come from internally generated funds.
MiTB has estimated additional acquisition-related expenses at approximately S$5.31 million (RM16.96 million). These costs include stamp duty, legal fees and technical due diligence expenses and will be financed through proceeds from the Mi Material listing.
However, renovation and fit-out costs have not yet been finalised, as they remain subject to detailed planning and cost assessments.
PublicInvest noted that the total financial commitment would exceed the stated purchase price once transaction expenses, applicable goods and services tax and renovation costs are taken into account.
Based on MiTB’s pro forma financial information, the acquisition is expected to raise its gearing ratio from 0.04 times to approximately 0.21 times, assuming bank borrowings of around RM247.2 million.
