This article first appeared in The Edge Financial Daily on December 5, 2017

KUALA LUMPUR: Kronologi Asia Bhd sees its new partnership with Temasek Holdings Pte Ltd’s unit to provide data backup services, as one that will open up avenues for the group to do business with the public sector.

“While there is no fixed dollar attached to the partnership, it provides a huge opportunity for Kronologi in terms of doing business with government entities,” Kronologi acting chief executive officer Philip Teo told reporters after the group’s extraordinary general meeting (EGM) yesterday.

On Nov 20, Kronologi announced its wholly-owned unit had inked an agreement with Trusted Source Pte Ltd — a unit of Temasek Management Services, which is in turn a member of Temasek — to jointly provide private data backup services for Trusted Source’s subsidiaries.

“It’s effectively a private cloud for Trusted Source,” said Teo, who is also the group’s chief technology officer. Through the partnership, both parties hope to cater to the growing demand for data storage and protection solutions.

According to Teo, Trusted Source is already providing certain services to Temasek.

Earlier at the EGM, Kronologi obtained its shareholders’ unanimous approval for its proposed acquisition of Quantum Storage (Hong Kong) Ltd for RM45 million. A sum of RM5 million will be paid in cash, while the balance will be settled via the issuance of up to 40.8 million new Kronologi’s shares at 98 sen each.

Following the acquisition, Kronologi will focus on integrating Quantum Storage (HK)’s business into the group, which Teo expects to take at least the first six months of its financial year ending Dec 31, 2018 (FY18).

With the integration, Teo expects a better bottom line for the group in FY18.

“For 2018, we will have a full recognition from Quantum Storage (HK) as opposed to about less than a months worth for 2017. We do expect that to contribute positively,” he added.

Teo highlighted the profit guarantee of US$1.2 million (RM4.88 million) from the acquisition as the base scenario the management is looking at, from which the group intends to grow the business further. “That’s probably what we’d like to achieve for next year, or even better,” he said.

Other than earnings contribution from the newly-acquired Quantum Storage (HK), Teo said the group is also seeing better response from other sectors like the oil and gas industry, most notably in the Malaysian market.

Meanwhile, its new transnational data backup solution that will be available in financial year 2018 is expected to be another earnings driver for the group.

In the first nine months of its financial year ended Sept 30, 2017, Kronologi’s net profit jumped 88.5% year-on-year (y-o-y) to RM8.6 million, as revenue rose 88.2% y-o-y to RM101.6 million.