This article first appeared in The Edge Financial Daily on October 5, 2018

KUALA LUMPUR: Home-grown network service provider MyKRIS International Bhd debuted on Bursa Malaysia’s Leading Entrepreneur Accelerator Platform (LEAP) Market yesterday at 23 sen, a three sen or 15% premium over its offer price of 20 sen.

The counter — the 10th to be listed on the LEAP Market — closed the day 12.5% higher at 22.5 sen, with 790,700 shares transacted.

This gives the group a market capitalisation of RM67.5 million.

MyKRIS managing director Chew Choo Soon said the group initially thought of expanding via the mergers and acquisitions (M&A) route.

It was keen on acquiring firms through share swaps “but somehow we found that a lot of companies are getting a bit sceptical about the company using privately owned Sdn Bhd shares”.

As such, it decided to go for the LEAP Market listing as now “people can accept our shares to be used as the instrument to acquire a company”, he told reporters after the group’s listing.

Chew said MyKRIS is in talks with upstream and downstream companies and expects to close deals as soon as possible prior to its proposed transfer to the ACE Market by the second half of next year.

He said upstream companies refer to those providing services in terms of infrastructure and bandwidth, while downstream companies are those that use the Internet services for their daily business.

“Negotiation with the companies is still ongoing and we have been working on it for quite some time. So, we hope to seal the deals as soon as possible to further strengthen our market positioning.

“When we work with them we are able to do consolidation and generate the synergies between us,” he added.

Chew said the LEAP Market serves as an “attractive path” for the group to later list on the ACE Market.

“So, it is like killing two birds with one stone. First, we need some cash for expansion and secondly, looking at our financial results, we also qualify to trigger the transfer plan at a later stage.

“It actually fulfils our M&A [aims] and our plans to expand our network coverage in Kota Kinabalu and Johor Baru by establishing and setting up our own wireless network infrastructure in these places,” he added.

“By having a branch there, it will help us in achieving a better number in our top line and bottom line,” he said.

At the same time, MyKRIS also intends to penetrate its managed network service business segment into Myanmar, Cambodia and Vietnam.

MyKRIS currently serves the education, retail and distribution, manufacturing, finance, as well as the hospitality and tourism industries.

According to MyKRIS’ listing information memorandum, the group placed out 40 million shares at 20 sen each to raise RM8 million.

Of this sum, the group plans to set aside 32.5% or RM2.6 million for expansion of business and operational facilities, 42.5% or RM3.39 million for working capital, and 12.5% or RM1 million for relocation and renovation of the headquarters.

The remaining 12.5% or RM1 million will be used to pay listing-related expenses.

For the financial year ended March 31, 2018, MyKRIS posted a net profit of RM7.12 million, up 7.6% compared with RM6.62 million a year earlier, while revenue fell 3% to RM34.86 million from RM35.95 million.