ENTERPRISE data management (EDM) service provider Kronologi Asia Bhd plans to strengthen its presence in existing and new markets in the region, following its listing on the ACE Market of Bursa Malaysia on Dec 15.
The company raised RM17.18 million in an initial public offering (IPO), with the issue of 59.25 million new shares at 29 sen each.
According to its prospectus, 34.9% or RM6 million of the proceeds is allocated for business expansion, with a focus on existing and future markets; RM3.5 million for R&D; RM4.48 million for working expenditure; and RM3.2 million for listing expenses.
Over the past 12 years, the Singapore-based firm has built a presence in the city-state, India, Thailand, Malaysia, Indonesia and the Philippines. It is now eyeing new markets, such as Vietnam, Myanmar and Sri Lanka, for its EDM solutions and services, which help businesses manage risks from digital data loss.
In a recent interview with The Edge Financial Daily, its executive chairman and group CEO Piti Pramotedham says there are “reasonable growth opportunities” in the new markets.
Essentially, Kronologi Asia ensures that its clients’ digital data is backed up and restored to ensure business continuity. Its clients include big names such as Public Bank Bhd, Bank of Singapore, StarHub Ltd and PTT PCL.
For its financial year ended Dec 31, 2013 (FY2013), the company posted a net profit of RM5.56 million on revenue of RM42.17 million, compared with a net profit of RM4.3 million on revenue of RM35.79 million the previous year.
In the first half of 2014, it registered a net profit of RM3.41 million on the back of RM28.1 million in revenue.
TA Research has forecast revenue growth of 34%, 15.7% and 11.4% for Kronologi Asia’s FY2014, FY2015 and FY2016 respectively.
“Growth will be driven mainly by the EDM infrastructure technology segment. Picking up on its expansion plan in Southeast Asia, we tag an above industry growth rate of 10% year on year for this segment,” it says.
The research house also expects Kronologi Asia’s pre-tax profit to grow 22%, 9.6% and 9.1% in FY2014, FY2015 and FY2016 respectively.
TA Research has set a fair value of 32 sen on the company, based on a price-earnings ratio of 12 times at FY2015 estimated earnings per share of 2.6 sen. At its IPO price of 29 sen and an enlarged share base of 236.99 million shares, Kronologi Asia’s market capitalisation will be RM68.73 million upon listing.
The IPO was oversubscribed by 35.5 times. Malaysian Issuing House revealed that it received 5,545 applications for 172.97 million shares from the public.
Bank Islam was Kronologi Asia’s principal adviser, sponsor, sole underwriter and placement agent for the listing exercise.
This article first appeared in The Edge Malaysia Weekly, on December 15-21, 2014.