Wednesday 29 Nov 2023
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This article first appeared in The Edge Malaysia Weekly on March 27, 2023 - April 2, 2023

IT is looking increasingly like mass electric vehicle adoption is coming. Facts that point to this include: Oil companies such as Petroliam Nasional Bhd ­(Petronas), Shell and BP (formerly known as British Petroleum) are putting in resources to create an ecosystem for EV users in many parts of the world.

Utility providers are also in the game. For example, Tenaga Nasional Bhd has earmarked RM90 million to install up to 70 direct current (DC) fast chargers nationwide by 2024.

Then there was the big news earlier this month that the world’s most famous EV company, Tesla, is setting up an office in Malaysia to import battery electric vehicles (BEVs), introduce Tesla’s “experience centres” and service centres, and establish its “Supercharger” network.

Also of significance is the fact that some local companies are making inroads into the EV infrastructure scene.

One of them is Amtel Holdings Bhd, which has been providing technology solutions such as GPS navigation systems, dashcams and built-in toll smart tag readers to car makers in Malaysia for more than 13 years.

For a few years now, the company has been quietly working on EV solutions.

Chief operating officer and executive director Chester Koid Siang Loong tells The Edge that Amtel began its EV journey with a local company called Comos back in 2015.

“To date, Amtel has supplied a total of 40 EV chargers, including 20 DC fast chargers. We plan to also introduce add-on services such as maintenance and mobile applications that can connect to these chargers,” he says, adding that the group aims to install at least 50 EV chargers this year.

For perspective, DC fast chargers cost a lot more — about RM200,000 each — and have faster charging speed compared with AC chargers (priced at RM3,000 to RM5,900 for a 7kW and RM5,000 to RM7,900 for a 22kW).

Koid recalls that the project with Comos was the country’s first EV sharing programme that was launched in 2015. Amtel was responsible for supplying EV chargers for the project. However, the Comos project did not kick off as planned.

“Although the project didn’t kick off as our EV adoption was still at a nascent stage, it taught us valuable lessons, primarily that there needs to be a focus on EV charger maintenance and connectivity. So, this is why we now have a system that enables us to manage our EV chargers remotely, to ensure that they are functioning well at all times,” he continues.

For competitive reasons, Koid declines to reveal the names of Amtel’s EV charger clients and at what price it is selling these units.

At present, the main installers for DC fast chargers in Malaysia are Shell, Petronas’ green energy solutions unit Gentari and Tenaga.

Gentari has a near-term target of installing 500 EV chargers by the end of this year, while the government has set up an ambitious plan of having 10,000 public charge points by 2025, of which at least 1,000 are to be DC fast-charging stations.

This bodes well for Amtel, as a supplier of EV DC fast chargers.

For now, Malaysia has 900 publicly accessible EV charging points, according to the Ministry of International Trade and Industry (Miti).

Game changer

Despite its presence on Bursa Malaysia for more than 25 years, Amtel is not on the radar of investors.

Apart from its shares being illiquid, its earnings and profit margins are also not exciting, which Koid attributes to the company’s research and development (R&D) expenses.

But that is about to change. Koid hopes that its EV business, new product launches and new customers will contribute positively to the group and improve its profit margins going forward.

Apart from EV chargers, Amtel specialises in the design and manufacture of automotive electronic parts for the Malaysian car market.

“In the past, Amtel had invested heavily in R&D for new products. It takes about three to five years to create a new product before we can monetise it. This year, we will be working on marketing our products and we are also looking at ways to create a recurring income model,” says Koid.

The growth in the local automotive industry has been the main earnings contributor to Amtel since 2007, when the group introduced its own GPS navigation system.

Koid explains that the group had invested almost three years to build the navigation system, which now can be seen in many Perodua cars.

“At that time (2007), the other navigation system provider was Google. The rest of the players in the market were mainly focused on gadgets. When we were building the navigation system, I had just graduated from high school and my first job was to drive a van with a built-in satellite to create a digital map,” he says.

The mapping system is still being used by local car manufacturers today.

Koid says the successful launch of its in-house navigation system has set a path for Amtel to grow as a technology company. To date, it has several other products, including built-in smart-tag readers and camera technology, also known as dashcams.

“Our main clients now are local automotive players such as Perodua, Proton and Toyota, and we are in talks with other automotive players,” he says, adding that the group hopes to secure a new client by the first half of this year.

Last week, Transport Minister Anthony Loke announced a plan to allow open payment systems — dubbed the multi-lane free flow (MLFF) — on highways that include debit and credit cards for toll payments as early as September this year. Currently, toll payments are being monopolised by Touch ’n Go.

According to Koid, this development bodes well for Amtel’s existing automotive product called LokaTAG, which is essentially a built-in smart-tag reader. “LokaTAG will be the first built-in toll card reader device in the market ready to facilitate other types of payment methods aside from the Touch ’n Go card,” Koid says.

“We have been working on this for several years and have successfully deployed this at our headquarters in Glenmarie, as we believe that an open payment system should be the way forward for better driver experience and seamless traffic movement at toll highways,” he adds.

In addition, Koid says the company is planning to launch an entirely new and innovative one-of-a-kind product related to this that will also include multi-card readers and dashcams in the coming months as part of its new product launches.

The group is also in talks with several insurance players to expand the use of LokaTAG to include a subscription-based model to expand the company’s recurring income.

Second generation takes over

From May 1, Koid, 34, will be taking over the helm of Amtel from his father, Datuk Koid Hun Kian. Hun Kian has been redesignated as an executive director of Amtel.

The junior Koid joined Amtel in 2014 and was appointed as an executive director to spearhead the business transformation of the company. Prior to joining, he had a three-year stint with the Royal Bank of Scotland (RBS), which was once the largest bank in the world prior to the global financial crisis in 2008.

“At RBS, I was part of the transformation team to turn around the bank following its collapse after the global financial crisis. I have been in corporate transformation since then,” he says. Koid graduated from Imperial College with a master’s degree in engineering.

For the financial year ended Nov 30, 2022 (FY2022), Amtel posted a 43% decline in net profit to RM2.03 million from RM3.56 million a year earlier. Revenue, however, grew 10.5% year on year to RM60.5 million from RM54.72 million.

A back-of-the-envelope calculation shows that Amtel’s profit margin had stood at a mere 3.36% in FY2022, almost half of what it had made in FY2021 at 6.51%.

In its recent quarterly results announcement, the group attributed the lower bottom line to slim margins of certain products and services and the increase in operating expenses.

The group had a net cash position of RM6.96 million as at Nov 30, 2022.

Of late, Amtel shares have been gaining some momentum. Over the past 52 weeks, its share price has almost doubled to 94 sen from 45 sen last July. It was last traded at 88 sen last Friday, giving the company a market capitalisation of RM84.3 million and price-earnings ratio of 42 times.

Its peers include MCE Holdings Bhd and Betamek Bhd, which is also in the business of design and manufacture of automotive electronic parts for Malaysian car manufacturers.

MCE closed at RM1.85 a share last Friday with a market capitalisation of RM103.9 million, while Betamek at 44.5 sen a share gave the company a market capitalisation of RM200.25 million.


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