This article first appeared in The Edge Malaysia Weekly on September 9, 2019 - September 15, 2019

THE oncoming tide of data hitting businesses is a boon for companies like Kronologi Asia Bhd — an ACE Market-listed on-site and off-site enterprise data management (EDM) and data storage solutions firm.

US-based market research firm International Data Corp estimates that 80% of worldwide data will be unstructured by 2025.

Today, business organisations are already struggling to manage and extract value from the influx of unstructured data, which comes in the form of emails, social media, blogs, documents, images and videos.

Traditional structured data conforms to a rigid format that ensures consistency when it is processed and analysed. Whereas unstructured data does not have a uniform, recognisable structure.

What’s worse is that unstructured data cannot be easily stored in a database and nor can it be compressed.

According to Kronologi CEO and executive director Edmond Tay Nam Hiong, the company enables businesses to unlock the potential of their digital data by managing, preserving and protecting it over its entire lifecycle.

“The new wave of unstructured data will be taking up a lot of space, creating a big data tsunami. From a business perspective, this is quite scary actually. But Kronologi could offer solutions that allow our customers to store their data on-site, via the cloud, or even hybrid,” he tells The Edge in an interview.

Since listing on Bursa Malaysia in December 2014, Kronologi has been expanding into China through its investment in Quantum China Ltd, as well as Hong Kong, Taiwan and India via acquisitions.

The group also broadened its EDM businesses — both infrastructure technology and managed services — via the acquisition of Sandz Solutions (Singapore) Pte Ltd, which provides information technology infrastructure solution services in the Philippines through its subsidiary, Sandz Solutions Philippines Inc.

Tay highlights that Kronologi’s annual revenue and net profit have been growing at a five-year compound annual growth rate of 24% and 22% respectively.

“Our group has been growing steadily, both organically and inorganically. The next big thing for us is to really focus on our three growth strategies — to acquire new customers, to develop new products and services and to expand deeper into our existing overseas markets,” says the Singaporean, who was appointed to the board in April.

Tay, 48, a trained accountant, has 22 years of experience in driving growth and sales in the technology industry.

Being a data storage specialist for over 15 years, Kronologi has made deployments in more than 620 sites, serviced by support from 11 offices in Asia-Pacific.

It has a diversified customer base, consisting of airports, airlines, port operators, food and beverage companies, banks, financial institutions, stock exchanges, smart cities, government agencies and telecommunications, media and broadcasting companies.

Tay reveals that the Malaysian Palm Oil Board is engaging with Kronologi to find new ways to extract palm oil. “They need to do genomics science on palm oil, which will involve a lot of data. It’s a huge challenge for them to manage, store and use the data. This could be something that we are able to help.”

Similarly, airports are using more surveillance cameras than ever, and these cameras are generating a lot of data as high-resolution videos are needed to identity passengers.

Essentially, higher resolution and more cameras mean more data.

“Airports are mostly national infrastructures. They have big IT teams, they have security concerns and they need our solutions badly. In fact, one of the world’s top five airports is using our services. We are pursuing another few airports in Asia,” says Tay.

For the financial year ended Dec 31, 2018 (FY2018), Kronologi’s net profit rose 34% year on year to a new high of RM16.26 million while revenue similarly increased 13% y-o-y to the highest of RM163.07 million, on higher volume of sales recorded in Singapore and contributions from Quantum Storage (Hong Kong) Ltd, which it acquired in December 2017.

Net profit continued to grow 34% y-o-y to RM8.75 million in first half ended June 30, 2019 (1HFY2019) while revenue rose 7% to RM84.57 million. This was mainly driven by higher contributions from its Hong Kong, Taiwan and India operations as well as the maiden contribution from the recent Sandz Solutions acquisition.

Geographically, Singapore accounted for RM35.3 million or 42% of Kronologi’s revenue in 1HFY2019. This was followed by Hong Kong, Taiwan and India, which collectively recorded sales of RM27.3 million or 32% of the group’s revenue.

Tay says Kronologi aims to achieve another record year in FY2019, and he is also not reserved about the group’s ambition to almost double its market capitalisation to RM500 million in the next three years. “Kronologi is still a growth stock. In the longer term, we even hope to hit the RM1 billion mark (in terms of market capitalisation).”

Year to date, Kronologi’s share price has fallen 2%. It closed at 59.5 sen last Thursday, giving the group a market capitalisation of RM291.1 million. The stock is currently trading at a trailing 12-month price-earnings ratio of 15.6 times.

“Valuation-wise, we think we deserve more. Certain tech stocks in markets such as Hong Kong and the US are trading well above 20 to 40 times,” says Tay.

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