Friday 29 Mar 2024
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KUALA LUMPUR: mTouche Technology Bhd is expected to report its ninth consecutive year of losses for the financial year ending Dec 31, 2015 (FY15) before bouncing back into the black from the second quarter of FY16 (2QFY16), driven by the roll-out of three new mobile applications in the domestic and Indonesian markets.

The ACE Market-listed company is currently developing Cybersecurity and Internet-related mobile applications to provide further growth opportunities. Group chief executive officer Zakhir Mohamed said the three new mobile applications are expected to contribute about 60% to group revenue by 2QFY16.

“We are optimistic that we can recover fast with the new products. We should be able to return [to the black] in 2QFY16 with the introduction of One Krypto application to the Malaysian and Indonesian markets in August this year," he told The Edge Financial Daily after the company’s annual general meeting last Friday.

One Krypto application allows for communication via SMS, chat and email to be sent in an encrypted form.

“We expect there will be teething problems at the initial stage of introduction but once people are familiar with it, the rate of growth will be exponential,” he said.

mTouche in February this year entered into an exclusive licensing and revenue-sharing agreement with Indonesia's PT Inovisi Infracom Tbk to grant the latter the rights to distribute, market and commercialise One Krypto in Indonesia, Thailand, Greater China, Japan and South Korea.

In April, mTouche also signed a master application and content provider agreement with Celcom Axiata Bhd to provide Celcom subscribers with the One Krypto application.

Zakhir said the need to develop new mobile applications comes at a time when its core business of providing mobile content and short messaging services is experiencing stiff competition.

“We needed to supplement the business and decided to go into the niche market of secured communication. However, we will continue to focus on our core business (short messaging servicing and mobile content provision) because it is still generating revenue for the group," he said.

“We spent a substantial amount [of money] on research and development in FY14 and FY15, which saw our operating expenses increase to create [new] products, including a collaboration with Taiwan-listed Arbor Technology Corp plc to  develop Internet of Things and smart city solutions in Malaysia,” he said.

Zakhir also said its mobile device management application, that enables user administrators to control the usage of the Internet at corporations and homes, is expected to be commercialised in 2QFY16.

mTouche (valuation: 0; fundamental: 1.35) shares closed up 3.57% to 15 sen last Friday, with a market capitalisation of RM31.24 million.


The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for more details on a company's financial dashboard.

 

This article first appeared in The Edge Financial Daily, on June 29, 2015.

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