HI Mobility's growth bet on Singapore traffic

[ASIA] HI Mobility, the Malaysian operator of Causeway Link buses, is counting on greater traffic from Singapore to fuel growth as it prepares to begin trading on March 28 following a rare listing by one of the country's transportation providers.

The company, the largest cross-border bus operator in both nations, raised RM116 million (S$35 million) in an initial public offering (IPO), valuing the company at US$137 million (S$183.5 million).

Over the previous five years, chief executive officer Lim Chern Chuen has observed a shift in the company's customer base as well as significant growth in its cross-border bus services between Malaysia's Johor state and Singapore.

While bus services were traditionally used by Malaysians traveling to Singapore for employment, Mr Lim stated in an interview that more individuals are travelling in the opposite direction to Johor as a result of the development of a special economic zone. More than 300,000 people cross the border each day, making it one of the busiest land crossings in the world.

Cross-border travel has increased due to a variety of factors, including improved infrastructure and more economic activity in Johor. The Iskandar Malaysia economic zone, formed in 2006, has drawn major investment and development projects, resulting in job opportunities and a thriving corporate environment. This has resulted in a continual influx of Singaporean workers and visitors to Johor, reversing the usual flow of commuters.

HI Mobility's revenue increased by 73% to RM207.7 million in 2024 from the previous year, while gross profit more than doubled. It runs 155 Causeway Link buses on the Singapore-Johor route, accounting for around one-quarter of its total fleet.

The company's expansion strategy includes both extending its fleet and improving its services through technological developments. HI Mobility has made significant investments in automation and digital technologies, such as mobile ticketing and real-time tracking, to improve customer experience and operational efficiencies. These innovations have distinguished it from competitors and contributed to its impressive financial performance.

Nearly half of its revenue in 2024 came from Singapore. It also provides bus services in Malaysia's capital, Kuala Lumpur, and the states of Selangor and Melaka.

The company's stock market launch represents a rare success story in Malaysia's public transportation scene, which is dominated by closely controlled state-linked firms.

Despite the obstacles of operating in a highly regulated market, HI Mobility has successfully carved out a space for itself. Its success can be ascribed to its strategic emphasis on cross-border services, which have shown consistent demand growth. The company has also benefited from a favorable regulatory environment, which has enabled it to grow its operations and services.

Mr Lim stated that HI Mobility's profitability is owed in part to its pursuit of automation to boost efficiency, and that it now provides automation and technical solutions as a service to other operators.

“If we look at mobility as a whole, that is where the market becomes even bigger, beyond just the buses we operate,” he said.

Founded in 2002 as Causeway Link by Mr Lim’s father Lim Han Weng, the firm was the first Malaysian bus operator to win a cross-border service licence.

The elder Mr Lim also launched Johor-based logistics firm Yinson Holdings, which is today an energy infrastructure company worth US$1.4 billion. Yinson is now preparing an IPO for its offshore floating production unit in the United States.

HI Mobility's transition from a modest bus operator to a publicly traded corporation highlights a larger trend of Malaysian businesses utilizing technology and innovation to drive growth. The company's IPO is expected to draw additional investment in the transportation sector, potentially encouraging other businesses to pursue similar prospects.

HI Mobility's IPO will be Malaysia's third-largest listing in 2025, with US$127 million raised so far, the biggest in South-east Asia. Malaysia’s stock market was also the region’s top IPO destination, hosting over US$1.8 billion worth of IPOs.