A-Sonic Aerospace hunts for Asean acquisitions, makes tech foray as it charts next phase of growth

[SINGAPORE] As A-Sonic Aerospace ventures beyond its aviation and logistics roots into the information technology space, the mainboard-listed company is looking closer to home for growth, actively scouting for acquisition targets with an established Asean footprint.

South-east Asia is where the growth is, said chief executive and chairperson Janet Tan, noting that the group’s strategy is to strengthen its regional network by growing its business volumes, thereby boosting the group’s buying power and, in turn, its bottom line.

Tan added that A-Sonic is looking at acquisitions that will allow for its regional expansion, particularly in places where it is not yet present.

“Our next acquisition will hopefully (take) us to a larger playing field and a bigger orbit within South-east Asia,” she told The Business Times in an interview.

Today, the group operates in three Asean countries other than Singapore: Thailand (Bangkok), Vietnam (Ho Chi Minh City) and Malaysia (Kuala Lumpur, Johor Bahru and Penang). It was earlier in the Philippines as well, but subsequently exited.

All together, A-Sonic operates in 28 cities across 14 markets, spanning Asia, Europe and North America.

About half of the group’s annual turnover in the 2025 financial year originated from mainland China – where it is present in 11 cities – and Hong Kong. Around a quarter came out of Sydney, Australia. The next largest contributions were from Singapore and the US, where it operates in two cities.

A-Sonic has two business segments: aviation and logistics.

Under the aviation arm, it purchases and sells aircraft engines and components. On the logistics side, it provides supply chain management services and solutions, including domestic and international multimodal transportation, warehousing, distribution, customs clearance and airport ground services.

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Aviation: “Low-key” presence

A-Sonic’s exposure in the aviation sector has been dwindling. In fact, in the second half-year ended Dec 31, 2025, the group’s entire turnover originated solely from its logistics business unit.

Asked if retreating from aviation was a conscious decision by management, Tan replied: “Right now, we are just keeping it low-key.”

“Previously, we used to buy pre-owned aircraft and engines to retrofit and sell; right now, we are just (doing so) where there’s opportunity… There’s some demand, but it’s not that fantastic,” she continued, adding that the group did not take inventory in the last two years.

On whether the aviation unit would eventually be phased out, she demurred: “I would like to think that when the next opportunity comes, we can always scale up because we have done (everything) from the sale of aircraft engines and components to the leasing of aircraft to the retrofitting and parting out of the whole aircraft.”

Logistics: Weighed down by China

The group’s logistics unit operates under two brands: A-Sonic Logistics, which oversees its door-to-door business; and UBI Logistics, which chiefly focuses on wholesale operations.

The group wholly owns most of the entities operating under the A-Sonic Logistics brand name and has an effective equity interest of 51 per cent in UBI Logistics, whose main geographic focus is China.

Broadly, UBI Logistics’ weaker performance – despite its higher cost savings – has weighed on the group’s profit gains.

The group’s turnover for H2 FY2025 dropped US$38.2 million, or 24.5 per cent, compared with the year-ago period. In a financial statement released on Feb 27, it attributed the decline largely to a US$40.1 million contraction under the UBI Logistics brand name.

The weaker contribution was said to be due to a drop in ocean freight rates and cargo volumes – as a result of US President Donald Trump’s slew of “Liberation Day” tariffs – and to decreased turnover from China, Hong Kong and Australia.

On UBI Logistics’ performance, Tan said that the unit is narrowing its losses and highlighted its reach across China, adding that she remains optimistic about its valuation prospects.

Despite the fall in revenue, A-Sonic recorded a 16.5 per cent gain in net profit to US$2.6 million for H2 FY2025, from US$2.2 million in the corresponding period a year earlier.

IT: The new frontier

Aviation was the mainstay of A-Sonic’s operations after the company was founded and listed in 2003. The group then expanded into the logistics sector a few years later.

A third thrust could soon emerge.

The company, via a wholly owned subsidiary, is on track to acquire a 55 per cent stake in IT firm RES Malaysia – a deal first announced in February. A completion of the acquisition would see RES, its two wholly owned subsidiaries and its 30 per cent stake in an associate company fall under the A-Sonic group.

The move will turn the group’s IT department into a profit-generating unit in lieu of a cost centre, and allow A-Sonic to advance its digitalisation, automation and artificial intelligence efforts, said Tan.

While the IT engine may not be a significant source of income for the group in the beginning, the intention is to continue growing it as a business, whether via acquisitions or organic growth, she added.

What’s brewing?

At its share price of S$0.50 as at Friday (Jun 26) close, A-Sonic is trading at a discount of about 18.8 per cent to its net asset value per share of S$0.6155 for FY2025.

In the first five months of 2026, the company bought back – by way of on-market acquisitions – more than 3.9 million shares for some S$2.1 million at the average price of S$0.527 per share, according to a Jun 2 market update by the Singapore Exchange.

In an Apr 1 report, Paul Chew, head of research at Phillip Securities Research, noted that A-Sonic has consistently been buying back shares to close the discount to book value, and believes that the cash hoard offers the company an avenue for inorganic growth.

Chew described the 2.6 million shares purchased in FY2025 by A-Sonic as “the most aggressive on record”. The highest purchase price then was S$0.535 per share.

Tan, who owns as at end-May some two-thirds of outstanding shares and is the biggest shareholder, remains confident about the company’s long-term prospects, despite challenges such as weaker logistics demand from China.

“Watch the sparrow,” she said, likening A-Sonic to the small bird that lacks the size to fly as high or as far as larger ones. The way she sees it, acquisitions will give the group the scale it needs. “It’s going to soar.”