This article first appeared in The Edge Financial Daily on January 29, 2018

KUALA LUMPUR: Green Packet Bhd expects to “easily” double its revenue in the current year after bagging the RM272 million contract to supply set-top boxes to MYTV Broadcasting Sdn Bhd.

Its chief executive officer Tan Kay Yen said the contract would also take the group back to the black in the year ending Dec 31, 2018 (FY18).

“For FY18, yes, definitely we will turn around. With this contract, we should easily double our last year’s revenue. Because of the size itself, even if it is [a] single-digit margin, it is already quite substantial,” Tan said, but declined to reveal the margin under the contract.

“The contract is for two years. Deliveries will mainly happen this year because the government is shutting down analogue transmission. In fact, we will be shipping as soon as next month (February),” he told The Edge Financial Daily.

For the first three quarters of FY17, Green Packet posted a cumulative net loss of RM18.38 million, compared to a net profit of RM66.44 million a year ago, on lower software and device sales. Revenue came in flat at RM259.18 million against RM256.6 million previously.

The information technology group announced the MYTV contract last week, involving the supply of up to 3.6 million units of set-top boxes.

Tan said the contract also opened up opportunities for Green Packet to supply set-top boxes to telecommunications (telco) players.

“We are doing some pilot projects with five telco operators currently. Three of them are in the Middle East and the other two in Asean. One of those in the Middle East is likely to close the deal with us soon, within this year,” he said.

On top of supplying set-top box  hardware, Tan said these projects also involve content delivery software via the Internet.

“TV is something that the mobile telcos have not gone into. With our box and software, we enable them to upsell their products through bundling for example. [We] give them a business model that they would never dare [to venture into], which is home [television],” he said.

Tan said Green Packet’s software enables smart devices to remote-control content to play on television.

“The closest product available in the market now is maybe Google’s Chromecast, but that was done through mirroring, meaning the video has to be played on a smart device while playing on the TV. Ours is unique in the sense that the TV takes instructions to play something, instead of mirroring it from somewhere,” he explained.

Beyond set-top boxes, Tan said Green Packet also hopes to fuel future growth by selling advertisements through three new television channels jointly operated with Asia Television Digital Media (M) Sdn Bhd (ATVM) — whose ultimate holding company is Hong Kong-listed Co-Prosperity Holdings Ltd.

“We are finalising the agreement. The due diligence [on the joint venture entity, Kiple Media Sdn Bhd] has been done as well. Now, we are building the business plan together.

“We hope to enter into a definitive agreement in the next two months. Maybe we will launch one channel in 2018, and the other two in 2019,” he said.

Kiple Media, currently wholly-owned by Green Packet, will see ATVM come in as a shareholder through a HK$50 million (RM24.8 million) investment.

Television aside, Green Packet is trying to develop its own mobile e-wallet business as well. Called kiplePay, it not only facilitates payment but also enables the group to keep track of merchants’ transactions.

“When we talk to merchants, we feel that there is a need for some short-term capital, so the model is similar to Alibaba. When we do online transactions for them, we know their monthly transactions. With these historical transaction records, we can infer their credit scoring, and maybe do some moneylending,” Tan said.

Last September, Green Packet obtained a conditional letter of approval from the urban wellbeing, housing and local government ministry under the Money Lending Act 1951, to provide moneylending services.

Green Packet’s share price fell 0.5 sen or 0.91% to 54.5 sen last Friday, giving the group a market capitalisation of RM409.3 million.