MALAYSIA-BASED, London-listed big data analytics outfit Fusionex International PLC sees itself on the cusp of an exponential growth phase as the industry gains traction.

Far exceeding expectations, the company is on track to meet its growth targets, says founder and managing director Ivan Teh.

“Traditionally, our revenue has grown about 30% each year and I don’t see us slowing down. Over the next three years, my target is to grow 10 times,” he tells The Edge.

For the first half ended March 31, 2015, Fusionex’s net profit came in at RM14 million, up 72% from RM8.1 million in the previous corresponding period. Revenue increased 26.4% to RM31.6 million.

According to Teh, the way Fusionex implements its big data analytics software — known as GIANT — is easily replicated and since its launch early last year, it has been proving its worth to customers.

“The number of customers we have now compared with the addressable market is small, so there is a lot of growth potential there,” he adds.

The company is aiming to secure 30 new customer accounts by the end of the financial year ending Sept 30, 2015 (FY2015). As at June, it had firmed up 27 contracts, not to mention a backlog of potential customers.

Teh is confident of meeting the FY2015 target, and hopes to at least double the figure in the next financial year.

This sentiment is echoed by London-based Edison Investment Research in a February note: “Given GIANT’s progress thus far, it is easy to contemplate the company doubling its GIANT subscriptions each year over the next three to four years.”

Among Fusionex’s existing customers are Intel, Shell, AirAsia, Qantas, Starwood Resorts, CIMB Group, Citi and Malaysia’s Ministry of Finance. This year, it added Mesiniaga, Takaful Insurance and Brother Industries to the list.

“I think there is immense potential and we’re seeing a lot of traction in this space. Big data is a huge phenomenon and it is going to explode at some point in time,” says Teh, who is the company’s largest shareholder.

“Data is doubling in size every two years globally and Asia is one of the biggest contributors. What that means is the data that was generated in the last two years alone is bigger than the data that was generated from the beginning of time. That’s mind-boggling and it can be quite intimidating for a company.”

GIANT processes and integrates this data, then displays it in an interactive, user-friendly interface that aims to shield its users from the technological complexities of big data.

A third of Fusionex’s annual revenue comes from Asia-Pacific, with Singapore, Malaysia, Hong Kong and Thailand being its prime contributors.

“We want to strengthen our foothold in these countries first, so that will be our focus for the next 12 to 18 months,” Teh says, adding that contracts in Indonesia and Australia are starting to trickle in.

The company is also trying to expand its reach to the Philippines, Taiwan and China by leveraging its presence in Hong Kong.

“We have got our work cut out for us. Because of this growth, we cannot spread ourselves too thin and neglect the US, UK and European markets,” says Teh.

He acknowledges the importance of these regions, which account for about 25% of Fusionex’s revenue. So to expand there, the company is seeking accretive partnerships.

Teh wouldn’t say no to mergers and acquisitions either, if the right opportunities arise, and sitting on net cash of RM40.5 million, the company is in a good position to do so.

Fusionex reinvests some 20% of its revenue in R&D, mostly in its main offering, GIANT.

“GIANT is constantly expanding because of adjacent opportunities that sprout up. With each customer, we are understanding better what people are looking for to make their businesses better, improve revenues, efficiencies and so on,” says Teh.

For FY2014, Fusionex reported a net profit of RM19.5 million on the back of RM57.1 million in revenue. R&D spend came up to RM11.4 million that year, a number that Teh intends to continually raise in a bid to stay ahead of the curve.

He is not the only one who is optimistic about the company’s prospects.

Only July 1, the stock closed at £3.825 for a market capitalisation of £165 million on the London Stock Exchange’s AIM. This values the company at nearly 50 times price-earnings ratio.

UK stockbroker and investment bank Panmure Gordon & Co has a target price of £6.92 on Fusionex, or an upside potential of 81%. It has a “buy” call on the stock and expects a more than 10% total return on the shares within a year.

“When I talk to Fusionex reference accounts, there is a constant message of great usability and a narrative about masking the underlying technical complexity in order to yield a speedy business return. For this reason, I would envisage that Fusionex is well placed to make [market] share gains,” Panmure analyst George O’Connor tells The Edge via email.

“The real threat is its ability to continually scale its organisation and execute on the market demand. So there, we must look at factors such as ability to hire and retain staff [and] ability to build a partner ecosystem as key determinants to continued success — as much as the product attributes and pricing,” he adds.

As Teh gets busy ruminating over his expansion options, only time will tell if Fusionex will meet market expectations.

This article first appeared in The Edge Malaysia Weekly, on July 6 - 12, 2015.

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