This article first appeared in The Edge Malaysia Weekly on February 19, 2024 - February 25, 2024

Although APB Resources Bhd is acquiring only a 10.4% stake in Globetronics Technology Bhd, its entry into the company marks a new dawn for the Penang-based semiconductor player.

APB’s entry into Globetronics comes as the major shareholders of the semiconductor player, the Ng family, exit the company. APB is acquiring the block of shares at RM2 apiece, which is a premium to the current market price.

In a circular to shareholders, APB explained at length the rationale for its investment in Globetronics, where it will be the second-largest shareholder after the Employees Provident Fund (EPF). It said the investment is a long-term strategy for it to diversify into the electronics industry. Moreover, Globetronics has been paying dividends regularly.

APB hinted that although it is the second-largest shareholder with significantly less than 20% equity interest, there are other ways to influence the company such as board representation and participation in the policymaking process. In relation to board representation, APB’s entry comes with three of its representatives being appointed to the Globetronics board of directors.

What’s more important for the new shareholder is to exude confidence on its future plans for Globetronics. It needs to show that it can take the semiconductor player to a new level.

Over the years, the Ng family has positioned Globetronics as an outsourced semiconductor assembly and testing player in the highly competitive industry. The company has testing capabilities and manufactures optical products and sensors for smart appliances.

Globetronics has always managed to come up with new products to cater for the fast-changing technology sector. The evidence is its splendid results over the years.

Also, it has regularly paid out on average 90% of its profits as dividends, making it attractive to institutional investors such as EPF and Kumpulan Wang Persaraan (Diperbadankan).

Can the new shareholder better the company’s performance?

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