Why a US-listed video game firm is paying a premium to take Ban Leong private
[SINGAPORE] For over 30 years, one little-known wholesaler and distributor of technology products – including IT accessories, gaming components and smart technology – steadily built up its distribution network.
Even after Ban Leong Technologies listed on the mainboard of the Singapore Exchange in June 2005, it remained largely under the radar to both consumers and investors.
Now, it is making headlines as video game distributor Epicsoft Asia, an indirect wholly owned subsidiary of Nasdaq-listed GCL Global, is splashing out cash to take the company private.
Headquartered in Singapore with regional offices in Malaysia and Thailand, Ban Leong is an authorised distributor for over 50 well-known brands, including Razer, Nvidia, Samsung, Huawei, TP-Link and LG.
'This acquisition is not a short-term play on stock performance, it's a strategic move to integrate Ban Leong's strong distribution and vendor network with GCL Global's digital capabilities and software portfolio,' GCL Global's chief executive Sebastian Toke told The Business Times.
'We see this as a platform for accelerating physical reach and product innovation in Asia's fast-evolving consumer tech landscape,' he added.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
The acquisition could also signal a trend where global software companies want control over physical touchpoints, especially in Asia.
'Software companies are increasingly seeking ways to influence the entire customer experience from digital interaction to physical product deployment,' Toke said.
'This is particularly relevant in Asia, where rapid urbanisation, strong mobile adoption, and consumer demand for smart devices are reshaping how technology is distributed and consumed.'
Epicsoft Asia last week made a cash offer of S$0.6029 per share to Ban Leong's shareholders.
This represents a 60.8 per cent premium over Ban Leong's last transacted share price of S$0.375 on Apr 29, the day before the offer was announced. It is also at a premium of 75.5 per cent to Ban Leong's volume-weighted average price of S$0.3435 over the last 12 months.
The offer price also represents a premium of 42.4 per cent over the group's net asset value per share of S$0.4233 as at Sep 30, 2024.
Epicsoft Asia has received irrevocable undertakings from Ban Leong's managing director Ronald Teng and his wife Teo Su Ching to accept the offer. Together, the couple holds 28.13 per cent of the company.
If Epicsoft Asia scoops up at least 90 per cent of Ban Leong shares at the close of the offer, it said it will exercise its rights to compulsorily acquire the remaining shares from shareholders who have not accepted the offer.
Since the offer was made, shares of Ban Leong have jumped 57.3 per cent to close at S$0.59 on Monday (May 5).
Toke believes there is 'untapped value' in Ban Leong's brand partnerships, regional infrastructure and sales network that justifies the premium paid.
'Ban Leong's assets hold strong strategic value that we believe has yet to be fully realised by the broader market,' he said.
For the latest first half-year to September 2024, Ban Leong reported earnings of S$1.4 million, down 36.2 per cent from S$2.2 million the previous year.
H1 revenue fell 4.8 per cent to S$97.5 million, from S$102.4 million previously.
'Beyond the numbers, Ban Leong has demonstrated strong adaptability to market shifts. It successfully expanded into e-commerce during the pandemic, attracted new brand partnerships, and grew its commercial segment,' Toke said.
'These are not typically reflected in the share price but point to operational depth and untapped growth potential,' he added.
Since its listing 20 years ago in 2005, shares of Ban Leong have climbed just 70.5 per cent to S$0.375, before the offer was made.
Long-time shareholders, though, might still rue its delisting.
The counter has generated a total return – with dividends reinvested – of 478.8 per cent over the same period. This works out to an annualised total return of 9.2 per cent.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
a day ago
- Business Times
China's Baidu eyes robotaxi expansion to Singapore and Malaysia
[BEIJING] Baidu is planning to launch its Apollo Go robotaxi service in Singapore and Malaysia as early as this year, according to a person familiar with the matter, as the company continues to expand its global footprint. Apollo Go is in discussions with potential partners to explore the right business models for the two markets, said the person, who asked not to be identified discussing private matters. Baidu chief executive officer Robin Li has previously said the company was seeking partners such as mobility service providers, local taxi companies and third-party fleet operators for an asset-light approach. The development comes as Tesla prepares to launch its Cybercab robotaxi network within days, with Elon Musk staking the electric carmaker's future growth on autonomous driving technology. At the same time, Chinese robotaxi companies including Apollo Go, and US-listed Weride and Pony AI are expanding into international markets such as the Middle East, Europe and South-east Asia. Baidu didn't immediately respond to a request for comment. Dow Jones Newswires reported the plans earlier. Apollo Go is fast scaling up. It has deployed than 1,000 self-driving vehicles worldwide, most of which are in China. It reached 11 million rides by the first quarter of this year, surpassing Alphabet's autonomous driving unit Waymo's 10 million paid rides as of May 23. The Baidu unit is also exploring entering Europe and Turkey, and was in talks with Swiss Post unit PostAuto to roll out a robotaxi service in Switzerland. BLOOMBERG
Straits Times
2 days ago
- Straits Times
China's Baidu eyes robotaxi expansion to Singapore and Malaysia
Baidu is planning to launch its Apollo Go robotaxi service in Singapore and Malaysia as early as 2025, a source says. PHOTO: ST FILE Hong Kong – Baidu is planning to launch its Apollo Go robotaxi service in Singapore and Malaysia as early as 2025, according to a person familiar with the matter, as the company continues to expand its global footprint. Apollo Go is in discussions with potential partners to explore the right business models for the two markets, said the person, who asked not to be identified discussing private matters. Baidu didn't immediately respond to a request for comment. Its chief executive officer Robin Li has previously said the company was seeking partners such as mobility service providers, local taxi companies and third-party fleet operators for an asset-light approach. The development comes as Tesla prepares to launch its Cybercab robotaxi network in the United States within days, with Elon Musk staking the electric car maker's future growth on autonomous driving technology. At the same time, Chinese robotaxi companies including Apollo Go, and US-listed Weride and Pony AI are expanding into international markets such as the Middle East, Europe and South-east Asia. Apollo Go is fast scaling up. It has deployed than 1,000 self-driving vehicles worldwide, most of which are in China. It reached 11 million rides by the first quarter of this year, surpassing Alphabet's autonomous driving unit Waymo's 10 million paid rides as of May 23. The Baidu unit is also exploring entering Europe and Turkey, and was in talks with Swiss Post unit PostAuto to roll out a robotaxi service in Switzerland. BLOOMBERG Join ST's WhatsApp Channel and get the latest news and must-reads.
Business Times
2 days ago
- Business Times
JPMorgan, Macquarie bet on S-Reits amid falling borrowing costs, MAS mandates
[SINGAPORE] Singapore-listed real estate investment trusts (S-Reits) could gain from falling interest rates, particularly those with a domestic focus, as well as The Monetary Authority of Singapore's (MAS) initiatives, reports from JPMorgan and Macquarie indicated. This comes as declines in various interest rates, such as the Singapore Overnight Rate Average (Sora) and treasury bills, have lowered borrowing costs, providing upsides for S-Reits, JPMorgan reported on Sunday (Jun 15). 'We believe this should generate upside for Singapore-focused Reits or stocks with resilient cashflows or leveraged balance sheets,' JPMorgan analysts said. Tariff risks, a weakened greenback, export front-loading, lowered commodity prices, capital inflows and monetary easing are among the factors that have spurred sharp falls in Singapore interest rates, they added. They pointed to Singapore-focused S-Reits with a larger share of Singapore dollar debt as prime beneficiaries of declines in Sora. With revenue growth, such S-Reits could get distribution per unit (DPU) improvements, the analysts said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up However, overseas-focused S-Reits or those more exposed to trade have clocked year-on-year declines in DPU with savings from Singdollar debt being offset by vacancies, foreign exchange headwinds and higher costs from refinancing low-priced overseas debt. A Macquarie Capital report dated Jun 16 also named some S-Reits, in addition to stocks, as potential winners from new MAS initiatives. Macquarie mentioned the central bank's Equity Market Development Programme that is set to channel S$5 billion to local fund managers, and other private capital to be injected into other mandates. Domestic-focused S-Reits win on lowered rates, borrowing costs CapitaLand Integrated Commercial Trust, CapitaLand Ascendas Reit (Clar), Keppel Data Centre Reit (KDCReit), Frasers Centrepoint Trust were among JPMorgan's top picks for S-Reits. Its top picks were Parkway Life Reit (PReit), Clar and KDCReit, which is set to join the Straits Times Index on Jun 23. Jayden Vantarakis, head of Asean Equity Research at Macquarie Capital, highlighted that PReit as a possible beneficiary. It has had an 'impeccable track record of steady growth since (its) initial public offering without raising funds' while facing limited downside risks, he said. Vantarakis said: 'We expect a rare quantum leap of PReit's Singapore rental growth in FY2026 once enhancements to Mount Elizabeth Orchard Hospital are completed.' Bank profits may suffer but fund inflows stay strong Broad monetary easing poses a 'significant headwind' for Singapore banks' profitability as it could lower net interest margin (NIM), JPMorgan said. The investment banking group foresees a 12 basis point year-on-year compression in NIM for 2025, with another 10 basis points for 2026. However, lowered rates have also accelerated flows into Singapore-dedicated funds over the past 12 months, mitigating the blow. Given this, JPMorgan analysts remained neutral on the sector. 'While banks will bear the brunt of lower interest rates, we believe the sector could still be supported by resilient yields and strong inflows from domestic funds subscriptions,' they said. MAS' S$5 billion inflow to give small- to mid- caps a short-run boost The S$5 billion inflow from the Monetary Authority of Singapore's Equity Market Development Programme could lead small- to mid- cap stocks to outperform in the short-run, JPMorgan said. As part of Singapore's equity market reform, the scheme aims to channel S$5 billion to fund managers focused on Singapore listed equities and to broaden investor participation beyond large-cap stocks. It prioritises funds with a higher weighting in small- to mid- cap stocks. However, a 'significant outperformance' over large cap stocks is unlikely, given higher multiples, uncertain profitability and lower liquidity and growth of such stocks. 'In our view, stocks with a good track record of earnings growth and quality balance sheets would attract additional flows,' JPMorgan analysts said. Quality mid-cap stocks and those with upside potential from asset recycling stand to be key beneficiaries, the investment banking group added.
