SINGAPORE (Sept 20): IPC Corp, a one-time seller of personal computers that later ventured into property development, is apparently set to return to its technology roots.

On Sept 18, the company said it would sell the Grand Nest Hotel Zhuhai for RMB200 million ($40.98 million) in cash and acquire a 51% stake in a Chinese company involved in artificial intelligence (AI) for $5.1 million in new shares priced at 40 cents each. For the three months to June 30, IPC reported revenue of $989,000, nearly all of which was from the hotel it now plans to sell. For the quarter, the company reported a loss of $1.24 million. As at June 30, it had a net asset value of 99 cents per share.

Shares in IPC last traded at 37.5 cents before the announcement, giving the company a market value of $32 million. The day after the announcement, the stock jumped as much as 60% to hit an intra-day high of 64 cents before closing at 52.5 cents.

IPC, whose name is an acronym for Intelligent Personal Computers, was founded by the Ngiam brothers, and it is still led by chairman and CEO Patrick Ngiam. However, its largest shareholder is Oei Hong Leong, a well-known asset trader and a son of Eka Tjipta Widjaja, the founder of Indonesia’s Sinar Mas group.

On the same day that IPC announced the sale of the hotel and the acquisition of the Chinese company, Oei publicly declared — without any specific reference to IPC — that he wants to spend US$5 billion to build a data centre business. He couched this as part of what he called a “One Belt One Net” initiative to build an IT services infrastructure that complements China’s Belt and Road Initiative.

Oei first bought into IPC back in September 2010, through an off-market purchase of shares at 16.09 cents each. Since then, he has made another seven rounds of purchases. The most recent was on June 2, when he bought 850,000 shares at 44.7 cents each. The last time shares of IPC stirred in a big way was in 2015, when the company sold a portfolio of hotels in Japan, which accounted for the bulk of its assets then. The following April, it returned $1.60 per share to shareholders via a capital reduction exercise.

Raised stake in Raffles Education Separately, Oei increased his stake in another listed company this past week. In a filing on Sept 20, Raffles Education said that Oei bought just over 6.1 million shares at an average price of 22.43 cents on Sept 17, bringing his total stake to 12.77%. Oei is currently the second largest shareholder of Raffles Education, behind its chairman and CEO Chew Hua Seng, who holds a 34.2% stake.

Shares in Raffles Education, which are usually thinly traded, surged more than 29% on heavy volume on Sept 20, before the shareholder filing was released at the end of the day, drawing a query from the Singapore Exchange. In its response after the market closed that day, Raffles Education made a specific reference to Oei’s purchases. It also said that Chew has been approached by parties “proposing various options”, but no definitive agreement has been entered into. “All these discussions have ceased,” the company added.

Oei’s purchase of shares in Raffles Education did not come out of the blue though. On Sept 5, he bought nearly 6.5 million shares for $1.26 million. That purchase did not draw much attention.

Oei could soon gain a major stake in another Singapore-listed entity, Asia-Pacific Strategic Investments. On Sept 12, the company announced that he is set to own at least 66.7% of the company if no other shareholders take part in a rights issue of more than 14 billion shares at 0.3 cent each. Oei does not own shares in this company, but will take up shares underwritten by the arranger UOB Kay Hian. The company’s share price has doubled since the rights issue announcement to close at 0.6 cent on Sept 21.

What’s Oei’s game plan? The big question now is how all Oei’s corporate interests will fit together. With the announcement of his data centre plans, Oei also sent out a filing at The Accounting and Corporate Regulatory Authority showing that he had incorporated a privately held company called One Belt One Net in Singapore on Sept 15. Yet, it is not clear what this company has to do with IPC, or Raffles Education, if anything at all. It also seems that IPC is forging a close corporate connection with a US-listed company, which does not seem to have a direct link to Oei. In its announcement of the sale of the Grand Nest Hotel Zhuhai, IPC identified the buyer as New York-listed Xinyuan Real Estate Co. IPC also said that the AI company in which it is buying a 51% stake is Beijing iJourney Technology Development Co, a subsidiary of Xinyuan Real Estate. The latter is a US-listed company whose largest shareholder is TPG Group Holdings, with a stake of just 8.49%.

Dalip Chandiramani, an individual investor who has observed Oei’s moves for years, says the corporate figure’s recent moves are consistent with his past behaviour. “He will first quietly stalk, and then when he’s ready, he will make a splash, and create a thematic play that points to a new direction for the market to focus on.”

In fact, Oei did attempt to ride the technology theme back in 1999, at the height of the internet boom. Back then, as chairman of Hong Kong-listed China Strategic Holdings, he unveiled plans to sell the roads, bridges and factories owned by the company and use the proceeds to buy technology-related business in the US. China Strategic Holdings is today involved in a diversified business of making and selling pharmaceuticals and batteries and its largest shareholder is Paul Suen Cho Hung, who is also a 23% owner of Singapore and Hong Kong-listed Courage Marine Group.

Oei was also famously involved in a bidding war for NatSteel against a consortium led by local property tycoon Ong Beng Seng back in 2002 and 2003, which he ultimately lost. At various points in time, Oei also took big stakes in some SGX-listed companies, including Intraco, Tung Lok Restaurants 2000, Informatics Education, BIL International and Super Group (the last two have since been delisted).

Oei’s latest move seems to be about driving Singapore into the age of AI and electronic payments. In his announcement, he said Singapore is by no means leading in these fields and it is time to do something about it. “Now, in the big data age, to catch up and to lead is imperative,” he said.

Oei’s moves send shares of IPC, Raffles Education, Asia-Pacific Strategic rocketing 

Oei’s moves send shares of IPC, Raffles Education, Asia-Pacific Strategic rocketing

Related News

Highlights

Data is the new oil but is it as dirty?

Related News

Hong Kong investor and EPF pare stake in Interra Resources, Riverstone respectively

DBS and Sea: Two ends of a barbell?

SGX sticks to multi-asset push as MSCI ditches Singapore to cast its lot with Hong Kong