ELECTRONIC-based Industronics Bhd has firmed up a partnership with China’s state-owned investment holding company State Development & Investment Corporation Ltd (SDIC) for collaboration on asset management and capital market services.
The memorandum of understanding (MOU) inked today between Industronics and SDIC is in sync with the former’s proposed acquisition of a 10% stake in Hong Kong-based renowned stockbroking, asset management and credit firm, Bluemount Financial Group Ltd last December.
One of China’s largest state-owned investment holding company, SDIC was established in 1995. By end-2020, SDIC has 682 bil yuan (US$107 bil) in total assets and about 50,000 employees. Its gross revenue and total profit in 2020 stood at 153.7 bil yuan (US$24.1 bil) and 22.1 bil yuan (US$3.5 bil) respectively.
Since its second pioneering campaign started in 2003, SDIC has been graded A-class in the annual performance assessment conducted by China’s state-owned Assets Supervision and Administration Commission of the State Council (SASAC) for 16 consecutive years and appraised as “excellently-performing enterprise” for five consecutive rounds.
“We are looking forward to working with SDIC. Given their strong track record in investment, restructuring and capital operation, we are confident that this will put us on a fast track to expanding into the capital market services,” commented Industronics’ executive director Datuk Chu Boon Tiong.
Under the MoU, Industronics will set up a local investment bank in Labuan and work with the regulators on the necessary compliance-related issues and other required approvals. On its part, SDIC will provide access to an estimated US$1 bil in funding for the setting up and expansion of asset management and capital market services.
“Our role is to deal with the local authorities and regulatory bodies for the set-up of the investment bank while SDIC will help on the funding for us to tap on the booming market in the asset management and capital market services,” asserted Chu.
He is confident that Industronics’ network and expertise on the local front will help to expedite the setting up of the investment bank in Labuan. In fact, the future collaboration plan between Industronics and SDIC entails an acquisition or collaboration with a local stockbroking firm in Malaysia.
Industronics’ expertise in cloud solutions and digital offerings, its proposed acquisition of Bluemount and the collaboration with SDIC will put the company in the driver’s seat to push for digital brokerage services in the region, thus capturing the market from the potential delisting of China companies in the US Stock Exchange.
Bluemount is a renowned Hong Kong-based stockbroking, asset management and credit firm valued at HK$250 mil (RM141.9 mil). It is well-funded with abundant capital, familiar with financial market operations and has rigorous internal control systems.
This has led to a profit of HK$10 mil (RM5.67 mil) and HK$20 mil (RM11.35 mil) in 2020 and 2021 respectively despite disruption from the COVID-19 pandemic.
At the close of today’s mid-day trading, Industronics was unchanged at 10.5 sen with 1.77 million shares traded, thus valuing the company at RM43 mil. – Aug 2, 2022
