This article first appeared in The Edge Financial Daily on November 6, 2017
KUALA LUMPUR: Kronologi Asia Bhd, one of the top performers on Bursa Malaysia this year, says the acquisition of Quantum Storage (Hong Kong) Ltd will enlarge its footprint and customer base, enabling the group to invest in developing skills for higher value-added solutions.
“With this development, we could leverage on the collective experience of the enlarged team for best practices for vertical solutions and provide additional analytics, which include artificial intelligence (AI),” said Kronologi acting chief executive officer Philip Teo. “AI has the potential to deliver significant values to our customers.”
Speaking at a media briefing last Friday, Teo said the growth of data storage solutions in the region is encouraging with the growth in digital surveillance and smart cities taking momentum.
Kronologi, he said, will use its experience in digital surveillance and introduce certain elements of AI to take advantage of the data available.
In India, Kronologi has already secured eight projects as part of the development of smart cities with its expertise in data storage and digital surveillance.
“AI and digital surveillance will require the integration of multiple data points to provide the cognitive technologies and even automated transcription. When we talk about smart cities, we also talk about collecting data such as pollution level, traffic and others, and all of these require data and storage,” said Teo.
He said the growth in predictive analytics and AI will continue to drive the growth for data storage and by having the ability to provide the required analytics, Kronologi will be able to deliver more sophisticated solutions.
“Currently, we’re collaborating with some other technology players to provide these additional solutions. We’re anticipating some form of AI solutions by next year but it’s an ongoing process for us,” he added.
The introduction of higher value solutions bodes well with the group’s strategy given the strong reliance on enterprise data management infrastructure technology.
Kronologi has proposed the acquisition of Quantum Storage for RM45 million, with about RM5 million to be settled in cash and the remaining via the issuance of Kronologi shares.
With the group already seeing an impressive growth in both its top line and bottom line at 88.2% and 88.5% to RM101.6 million and RM8.6 million respectively during the nine months ended Sept 30, 2017, Teo said Kronologi is on track according to the management’s direction.
He expects a significant improvement in the full-year results based on the fact that the nine-month figures are already higher than the figures for the entire previous year. Also, the fourth quarter is usually the strongest quarter for the group based on its historical track record.
Teo said that upon completion of the acquisition of Quantum Storage, Kronologi would see an even more diversified earnings from a geographical point of view.
Currently, the group’s revenue is concentrated in Singapore (60.5%) followed by other parts of Southeast Asia at 13.7%.
Based on Quantum Storage’s financial results for the year ended Dec 31, 2016 (FY16) and the first half of FY17, Kronologi would see a more balanced and diversified earnings from different regions.
“Moving forward, once the acquisition is completed, Hong Kong will play an important role. Similarly, earnings growth should be quite evenly distributed among Singapore, India, Hong Kong and Southeast Asia (excluding Singapore),” Teo added.
The presence in different regions also opened up an opportunity for a transnational backup as an option for data protection and allows the option of data protection beyond the primary site, said Teo, adding that it also provides faster access and better security control.