Merkado Barkada
September 2, 2025 | 8:30am
Merkabo Barkada (MB): What modified after the IPO to provide such a considerable shift in technique (from development to acquisition) with respect to rising TOP’s service station community?
Erik Lim (EL): After we constructed our first Gentle Fuels station in 2022, the method took appreciable time, significantly in securing permits, which might be tedious and difficult for brand spanking new and impartial gamers. After the IPO, we acknowledged that shifting a part of our technique from purely constructing new stations to buying present ones would permit us to speed up growth considerably.
Acquisitions give us quick entry to income and income-generating websites, whereas additionally offering flexibility to renovate and rebrand them into Gentle Fuels stations. This permits us to maximise their potential by integrating our full vary of providers.
At its core, TOP’s technique stays the identical, growth remains to be the sport plan. What has modified is the tempo.
By complementing development with acquisitions, we have now been in a position to fast-track our development. As an alternative of concentrating on 30 stations by 2027, with our present acquisition momentum, we are actually poised to attain 50 Gentle Fuels stations as early as the tip of 2025. We’re very enthusiastic about this accelerated trajectory.
MB: What inner guardrails does TOP have to stop a case of development hangover? What facets of this pivot insulate in opposition to development hangover? What facets are worthy of ongoing consideration?
EL: At TOP, self-discipline has at all times been on the core of our development technique. Even earlier than our itemizing and since our IPO on April 8, we have now remained centered on our area of interest market, the two-wheeler and bike phase, which makes up about 68% of street customers in Central Visayas. By anchoring our growth on this underserved but dominant market, we make sure that development stays focused and sustainable.
Central Visayas, our house market, continues to outpace the nationwide GDP development fee. This macro development insulates us in opposition to a “development hangover,” because the underlying demand in our major market continues to broaden. As an alternative of overextending, this provides us momentum and confidence that our development is grounded in robust fundamentals.
Operationally, every potential website undergoes rigorous analysis to verify each monetary viability and buyer worth. This self-discipline acts as our inner guardrail, guaranteeing that growth choices align with market demand and investor returns. What we frequently pay shut consideration to are execution self-discipline, website efficiency monitoring, and sustaining our area of interest focus, so development interprets into long-term resilience and profitability.
MB: What’s the key metric that TOP will use to measure the success of the acquisition technique? What’s the new danger/reward matrix for this strategy?
EL: Relating to evaluating acquisitions, TOP considers a number of elements, location, buying and selling space, and website measurement—however the important thing metric we use to measure success is Return on Funding. ROI, coupled with the safety of lease phrases, permits us to make sure that every acquisition delivers sustainable returns over the long run.
When it comes to danger/reward, acquisitions shift the steadiness in a good method. Whereas new builds can take time and face regulatory hurdles, acquisitions give us quick entry to revenue-generating websites. The reward is quicker money circulation and accelerated growth. The danger, in the meantime, lies in integration, ensuring every acquired website meets our operational and model requirements. With our current community acquisition, we count on its alignment with the Gentle Fuels branding to be accomplished by early subsequent yr. For this reason our website choice course of stays extremely prudent and disciplined, guaranteeing that each station we herald strengthens, somewhat than stretches, our community.
MB: For present TOP stations, what share of service station income comes from non-retail sources (c-store, carwash, bayad facilities, and so on)? How does this evaluate (on common) to the not too long ago acquired service stations? How will TOP roll out its non-fuel income helpers throughout the acquired station community? How lengthy will that take?
EL: At current, about 95% of income in our present stations nonetheless comes from forecourt gas gross sales, with solely round 5% contributed by non-retail sources equivalent to comfort shops, automobile washes, and cost facilities. This combine is typical for newly constructed impartial stations.
For our not too long ago acquired websites, the place to begin is comparable; gas stays the dominant driver. Nonetheless, the chance lies in systematically rolling out our non-fuel income enhancers throughout the community. We’re executing this in clusters, guaranteeing that whereas stations bear rebranding and renovations, they continue to be operational and revenue-generating.
The complete rebranding and integration of non-fuel providers are anticipated to be accomplished by early 2026, with sure clusters already beneath development as we speak. This phased rollout permits us to steadily improve the share of non-fuel income whereas accelerating total development.
MB: What Gentle Fuels station has the weirdest each day sample? (Like possibly there’s a station close to a fishing port that sees the most important spike within the morning earlier than mild with an enormous run on power drinks)
EL: Most likely essentially the most hanging, although not precisely “bizarre” sample we’ve seen is how robust our bike phase has turn out to be. Trade averages recommend a 60/40 automobile combine (60% four-wheel and up, 40% bikes), however at our Gentle Fuels stations, it’s flipped the opposite method: about 80% are bikes, which completely matches our area of interest focus. We’re thrilled about that!
One enjoyable purpose behind this might be our newly rolled-out automated motor wash system—the primary of its variety in Central Visayas, and presumably even the Philippines. It solely takes 5 minutes for a full wash, and riders actually love the comfort. So as an alternative of a “bizarre” sample, we see a really comfortable one: extra bikes, extra loyal prospects, and extra causes to maintain innovating for them.
MB: TOP’s inventory has gone by way of an insane interval of volatility. It’s acquired to be unattainable to observe that with Zen-like detachment. How did the previous few weeks really feel for you, and the way was the water cooler discuss within the workplace on a few of these days?
EL: You recognize what, MB, we tried our greatest to be Zen masters by way of all that volatility, however after all we’re solely human. We have been genuinely stunned, and extra importantly, deeply grateful to our traders and shareholders for the arrogance mirrored in TOP’s inventory appreciation.
Inside the corporate, it sparked a variety of power and pleasure. On the identical time, it reminded us that efficiency is what actually issues. As a newly listed firm, we’re nonetheless studying the ropes, however we’re inspired and motivated to execute our methods even higher.
MB: Is there any plan for TOP to try to benefit from this “up to date” valuation as soon as the cool-down interval ends? Do you assume there’s sufficient demand to justify some type of follow-on supply? If I have been a shareholder, I’d be begging TOP to boost cash ASAP to not less than be one of many events that would profit from the raised worth.
EL: To be trustworthy, we haven’t significantly thought-about a follow-on providing simply but. Our IPO was only some months in the past, and proper now our focus is squarely on efficiency. Delivering on what we promised our traders stays our prime precedence.
That mentioned, one of many fascinating issues we’ve skilled since itemizing is that new alternatives have opened up, collaborations and acquisition offers that weren’t even on the desk earlier than. Whereas we’re not speeding into any capital elevating strikes, we stay open to evaluating choices that may strategically strengthen TOP and create extra worth for our shareholders.
MB: Thanks, Erik. I actually admire you taking the time to thoughtfully reply my questions on TOP’s post-IPO life and what’s in retailer for the longer term. Better of luck to you, the Lim Household, and the remainder of the TOP govt group!
EL: Thanks, MB. I actually loved your considerate and insightful questions, they really acquired us reflecting on many issues. As I discussed to the group, TOP’s journey as a listed firm has been transformational for us, not simply professionally but in addition personally, and it makes us much more excited concerning the street forward.
Wishing you an amazing day as effectively, and God bless!
MB bottom-line: Whereas I respect the Lim Household’s execution and luxuriate in Erik’s partaking strategy to our interviews, I didn’t attain out to the TOP group simply to schedule a glazefest. I wished to get a better have a look at the explanations behind their large technique shift and get a greater sense of how this modification may drive TOP’s development into the longer term. I additionally wished to examine in to see if the inventory’s outrageous run-up had shifted TOP’s plans. To me, TOP is making changes in response to organizational expertise (gradual allowing course of on contemporary builds) and new alternatives (acquisitions), and that is the kind of agile optimization that I prefer to see from a administration group. As at all times, please don’t take this interview or my evaluation as an endorsement for TOP. As you’ll be able to most likely guess from my questions, I’m nonetheless processing the technique pivot and the value surge. That mentioned, TOP checks off a variety of organizational bins that I search for in a possible funding goal, it’s simply in an trade that I had not thought-about as a part of my funding thesis. If the gas sector is of curiosity to you, maybe Erik and the TOP group have earned themselves a better look. However, as at all times, that’s a selection that every investor must make in accordance with their very own circumstances!
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