Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on October 4, 2017

KUALA LUMPUR: Cloud solutions provider Cloudaron Group Bhd, the first to be listed on Bursa Malaysia’s new Leading Entrepreneur Accelerator Platform (LEAP) Market, made a stellar debut yesterday.

Its share price jumped 50%, or 5.5 sen, over its issue price of 11 sen on its maiden trading day — making it the best performer on the first trading day in the past 12 months. However, the trading volume was thin with 315,000 shares traded. Only qualified investors registered with Bursa can participate in the trading of LEAP-listed shares.

Speaking at the company’s listing ceremony, its executive director Lum Piew said Cloudaron is seeking to either build or acquire third-party digital business platforms, to expand its portfolio to attract more clients to use its services.

“Not many digital network or cloud solutions providers run their own online business, which can provide a full experience on the ins and outs of digital business platforms on top of the services being provided,” said Lum.

“By having a performing online business platform, it will show that we are qualified to bring the right solutions to our customers,” he added.

The company has bought a 10% stake in a Canadian real estate software-as-a-service (SaaS) company, which runs Ubertor, a subscriber-based online platform for real estate agencies. Cloudaron also operates online insurance platform RajaPremi and online property investment site DanaProperti — both based in Indonesia.

Set up in 2009, Cloudaron is currently controlled by the founder and chief executive officer Ong Chang Jeh, with a 34.3% stake, and tech investor Datuk Larry Gan Nyap Liou, its chairman, with 8.1%.

Cloudaron’s core businesses comprise providing integrated digital platforms for workplaces and cloud infrastructure solutions.

Its clients include government, health, education and financial institutions, with customers not just in Malaysia, but also in Singapore, Indonesia, the Philippines, and Thailand. In Malaysia, Ong said Cloudaron controls the biggest market share of SaaS business to private education institutions.

On organic growth, Ong said the company is eyeing more education and financial institutions to offer its services. “We already have customers from the financial sectors,” he said, citing Singapore-based United Overseas Bank and Singapore’s Central Provident Fund Board as examples.

“With our existing track record, we are confident about our technical and security capabilities in attracting more players on board,” he added.

Cloudaron is not discounting the possibility of more fundraising from the capital market in the future to support its merger and acquisition plans, as it has fully allocated proceeds from its listing debut, mainly to open new representative offices in Indonesia and the Philippines.

Its LEAP debut raised RM5.5 million via the issuance of 50 million new shares — representing 6.4% of its enlarged share capital — at 11 sen apiece to sophisticated, or high-net-worth investors.

For the financial year ended March 31, 2017 (FY17), Cloudaron recorded a net profit of RM5.2 million, on RM69.6 million revenue.

Ong said the much higher net income in FY17 compared with its 15-month period ended March 31, 2016 of RM126,000, was due to the inclusion of income from the companies it acquired, including Pro-Datech Systems Pte Ltd, which is now its cloud infrastructure arm.

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