For over 30 years, ISDN Holdings (SGX: I07) has helped customers advance their capabilities, through its expertise spanning the entire industrial technology stack – from components to machines to advanced cloud systems.
Today, ISDN operates two primary business segments, its core Industrial Automation (IA) and Renewable Energy (RE) businesses. Its Industrial Automation business provides a full range of high-performance automation solutions and services, under four pillars: Motion Control, Precision manufacturing, System Solutions and Software Solutions.
ISDN entered the Renewable Energy business more recently, in 2013, focusing on mini-hydropower projects in Indonesia. Currently, the group operates three hydropower plants with a total capacity of 24.6 MW, and is in the process of constructing two more hydropower plants.
At the topline, Industrial Automation still contributes 94% of its revenue – where PRC accounts for 71% of its sales.
For those who want to better understand ISDN’s business, and learn more about Asia’s industrial future, here are 5 things to know.
#1 Revenue Contribution For Renewable Energy Has More Than Doubled In 1H2024, But Other Segments Have Remained Fairly Constant.
What Strategies Does The Group Have To Ensure Continued Growth Across Its Operating Segments?
The significant growth in Renewable Energy (RE) revenue in 1H2024 was driven by the successful commercialisation of all three mini-hydropower plants. FY2024 was the first full year of contribution from the three mini-hydropower plants. This strong performance highlights the benefits of our strategic diversification, as RE provides a recurring and stable income source, complementing the cyclical IA segment.
The Group has also invested strategically to strengthen core capabilities, expand market share, and positioning ourselves for recovery. While we have observed early signs of turnaround in our key target markets in early 2025, uncertainties in the market have increased since the announcement of tariffs by US President Donald Trump.
Although, we do not foresee any material impact as of now due to our “Asia-for-Asia” strategy, we are continuously monitoring the situation and will evaluate mitigation strategies accordingly.
#2 Revenue And Profitability Declined Between FY2021 And FY2023. Can You Share What The Group Is Doing To Improve Things?
FY2021 and FY2022 were characterised by a broad-based downturn in cyclical sectors as inventory digestion took precedence and orders were pushed back. The Group was impacted by the global downcycle and weakness in the electronics and semiconductor industry.
A majority of the revenue impact was driven by a broad-based slowdown in our key market, China.
However, the Group continued to invest through the downcycle and remained committed to building strategic capabilities for long-term growth. As a result, ISDN gained market share in its core markets during FY2023.
In FY2024, the Group achieved broad-based growth across business units and regions, underscoring the effectiveness of our strategic initiatives. In China, the IA business grew 4.0% year-on-year (yoy) in 2H2024, while in Southeast Asia, IA revenue increased 3.1% yoy.
With China’s manufacturing sector rebounding, persistent labour shortages, and Southeast Asia being a key beneficiary of the ongoing global supply chain reshuffling towards a “China+1” model, the Group is well-positioned to capitalize on emerging opportunities and drive long-term sustainable growth.
#3 Please Share More About Inorganic Growth Opportunities, Such As Acquisitions Or Partnerships That ISDN Has Undertaken, And How These Have Benefited The Group.
ISDN actively pursues M&A and partnership opportunities that create synergies and strengthen our core capabilities. In the past two years, we have made several strategic investments and partnerships to expand our expertise and market presence:
- Set up Novapeak, expanding our capabilities in AI-powered drone inspection for buildings.
- Set up Servo Technology Sdn Bhd, bolstering our competitiveness in Malaysia’s IA market, especially in the semiconductor sector.
- Invested in FUJI Master Engineering, further enhancing our capability in custom automation, test solutions, and Industry 4.0 manufacturing.
- Increased stake in IDI Laser, providing advanced laser solutions for emerging semiconductor applications.
- Exclusive distribution agreement with Dafang AI Pte. Ltd, bringing the only 3-in-1 construction robot to the market, approved for adoption by HDB in Singapore.
Our M&A and partnership strategy aligns with ISDN’s four key pillars in the IA segment, allowing us to proactively adapt to industry shifts and strengthen our competitive edge.
#4 What Are ISDN’s Key Advantages Over Your Competitors In The Industry?
ISDN leverages over 30 years of expertise to deliver a full stack of IA solutions, from hardware to software and from components to cloud solutions, providing customers with comprehensive, tailored support.
Beyond technology, ISDN is present across various geographical regions. With a strong presence across China and Southeast Asia, including key growth markets like Malaysia and Taiwan, the Group is well-positioned to capture opportunities from the ongoing supply chain reshuffling and the region’s growing demand for high-tech manufacturing solutions.
Another key differentiator is ISDN’s resilient business model. By strengthening our core capabilities even during industry downturns, we have built a solid foundation for long-term, sustainable growth.
In addition to IA, our hydropower business generates stable, recurring revenue, balancing cyclical fluctuations and providing greater financial resilience.
#5 Are There Any Future Developments That Investors Should Keep An Eye Out For?
ISDN is poised for a new phase of growth, driven by a broader market recovery, strategic expansion, structural growth drivers, and a resilient, well-balanced revenue stream.
Establishing presence in high growth geographic markets remains a key priority, particularly in Malaysia and Taiwan, two high-potential markets for IA and semiconductor manufacturing. With a favourable policy environment and increasing investments under the “China+1” supply chain shift, ISDN has established new facilities in these key semiconductor hubs to enhance market access and capture emerging opportunities.
Beyond automation, our hydropower business continues to grow as a stable revenue driver. With three mini hydropower plants generating recurring income and Lau Biang 2 and 3 scheduled for completion in early 2026, the RE segment strengthens ISDN’s ability to balance cyclical and non-cyclical revenue streams, ensuring long-term resilience.
Looking ahead, ISDN’s commitment to advancing our technological capabilities and expanding in strategic industries aligns with secular long-term growth trends in technology and global industry shifts, reinforcing its position for sustained value creation.
Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 25 March 2025 and republished with permission. You can read more ISDN Holdings (SGX: I07) on the SGX website.
You can also read other featured companies from SGX’s 10 in 10 series on the DollarsAndSense website.
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