Ayala subsidiary aims for $1B revenues by ’16

MANILA, Philippines—Ayala-led Integrated Micro-Electronics Inc. (IMI) is in the running to be the first $1-billion Philippine-owned electronics manufacturing services (EMS) firm in terms of revenues by 2016 but to date, the company believes its shares are significantly “undervalued” by the market.

Speaking to reporters after IMI’s annual stockholders’ meeting on Friday, IMI president Arthur Tan said the reason why the company was struggling to meet the requirement to conduct an initial public offering (IPO) was that IMI was being valued by the market way below what the company felt was a reasonable enterprise value of at least $300 million.

As of Friday’s close, IMI was valued by the market at P5.2 billion, or about $116 million.

“We’re working on it. We’re seriously looking at something to increase the float but unfortunately, if you release more shares right now, it’s not fair to the current stockholders,” Tan said. “We’re visiting what our current structure is, looking at what it will take to unlock values.” One option is for IMI to bring in a strategic investor who believes in its growth story.

IMI listed by way of introduction on the Philippine Stock Exchange in early 2010 but has been unable to meet the subsequent requirement to conduct an IPO.

“At the end of the day, it’s the sustainability of the business that we have—the type of products that we build and where they go. I think a lot of people will have to understand the value of IMI,” Tan said.

Given the type of products that IMI builds, especially its scale toward the automotive industry, Tan said the company was “undervalued” in price-to-earnings ratio relative to EMS peers with a similar focus but once all EMS companies are lumped together regardless of business focus, then its valuations would be deemed high.

In the annual report given to stockholders, Tan said the global market was returning, with electronics playing a central role, giving IMI a good tailwind.—Doris C. Dumlao