Mi Technovation's S$104mil Singapore hub to anchor next phase of AI, EV powertrain growth

KUALA LUMPUR: Mi Technovation Bhd's acquisition of a S$103.9 million industrial space in Singapore is a strategic move to bolster its electric powertrain and autonomous driving technologies. PublicInvest sees this $103.9 million (RM331.8 million) purchase of the KHL building, handled by wholly-owned subsidiary Ohima International Pte Ltd, as a long-term investment instead of a typical property deal.

This new Singapore hub will serve as a global base for the Vehicle Technologies Business Unit (VTBU), allowing the company to tap into the anticipated demand for their advanced mobility solutions. Currently, there's a pipeline of over 181 powertrain units, valued at an average of US$40,000 each, with talks for 5,000 to 10,000 more units.

MiTB aims to deliver 45-55 powertrain systems this year, having already secured 27 units so far. The VTBU is projected to be the company's major growth driver in the next five years, with more sales orders expected from this year onwards. PublicInvest keeps its "Outperform" rating on MiTB, forecasting a sum-of-parts price of RM9.45 per share.

The acquisition will add about 10,348 sq m of usable space to MiTB's Singapore headquarters, formerly occupying just 568 sq m in Queenstown. VTBU also operates research and manufacturing sites in Hangzhou, Xi'an, and Chongqing, China, totaling around 10,809 sq m. The new Singapore facility will accommodate key functions like MiTB's main data center, AI hub, product strategy center, and customer experience zones.

The deal will be funded by a mix of bank loans (74.5%), Mi Material's stock listing (24.5%), and internal funds (1%). Minor costs of about S$5.31 million (RM16.96 million) will be covered by the stock listing proceeds. These expenses will be offset by the overall capital commitment, which will surpass the headline purchase price considering transaction fees, taxes, and fit-out costs.