Visteon Corp. (VC:US), the auto-parts maker focusing on Asian growth, is considering leaving the New York Stock Exchange and trading in Hong Kong, where investors recognize the company’s value, its top executive said.
“In Asia, where the bulk of our business is and the bulk of the automotive industry is, this is a growth industry, but we’re not getting growth multiples,” Chief Executive Officer Tim Leuliette said in an interview after a Bloomberg auto forum in Southfield, Michigan, yesterday. “We need to start being valued on where we do business, not where we’re domiciled.”
Visteon, which emerged from bankruptcy in 2010, does less than 10 percent of its business in the U.S. and is growing rapidly in Asia, Leuliette said. The Van Buren Township, Michigan-based company is still viewed by U.S. investors as a mature Detroit auto stock with limited growth potential.
On the NYSE, “we’re trading at a discount because we’re Detroit,” Leuliette said. “If there is a pox on an industry in a particular region because of historical issues that is clouding the value proposition, we need to find a solution to that.”
That solution may be delisting Visteon from the NYSE and trading on the Hong Kong exchange, Leuliette said.
“That’s an option we should consider,” he said. “We have to create shareholder value. That’s what we’re paid to do.”
Visteon was unchanged at $73.77 at 12:11 p.m. New York time. The shares gained 37 percent this year through yesterday, trailing the 40 percent increase for the Bloomberg Americas Auto Part/Equipment Index, which has 24 stocks, including Visteon.
Visteon earned $134 million in the first half of this year, up from $46 million a year earlier. Revenue rose to $3.75 billion during the period, up from $3.41 billion a year earlier.
Last year, Visteon derived 48 percent of its revenue, or $3.28 billion (VC:US), from Asia. North America accounted for 20 percent of the company’s revenue, while Europe was 35 percent.
Visteon, spun off from Ford Motor Co. (F:US) in 2000, has tried to dispose of lower-margin units to focus on faster-growing Asian operations after exiting bankruptcy. Leuliette, 63, formerly part of a bloc of Visteon directors who favored revamping the company, became CEO last year after the company failed to generate consistent profits.
“We’re a global business and we should be valued on a global basis,” Leuliette said. “We’ve got to make sure that we just don’t sit back and use a U.S. yardstick of a mature industry on what is globally a high growth industry.”
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