Palette hopes to return to the black with i-medic

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KUALA LUMPUR: ACE Market-listed Palette Multimedia Bhd, which has been loss-making for the past six years, hopes to turn around its performance with i-medic, its new mobile healthcare cloud system that can connect multiple medical and fitness-tracking devices through a mobile application that runs on smartphones or tablets.

The product allows users or patients to have their vital signs such as blood pressure, blood oxygen, body temperature and blood glucose to be taken and uploaded to the cloud immediately at any time and place.

Palette founder and chairman Eg Kah Yee said the company has leveraged its core competency in wireless networking and system software over the years to build the i-medic, which it expects to be a major revenue contributor for the company in the next few years and the catalyst that it needs to return to the black.

“Our loss-making position in the past few years has been due to spending on i-medic. It took us (the company) many years to put not only the wireless technology components together, but also the business and e-commerce aspect that the product has, and not to forget the medical knowledge gained from working with doctors,” Eg told The Edge Financial Daily after a media briefing on i-medic last Thursday.

In its financial year 2008 (FY08), it recorded a net loss of RM5.12 million. The financials seemed to have improved in FY09, when net loss dropped to just RM757,396, but then in FY10, it deteriorated to a loss of RM2.96 million, followed by another equally bad year in FY11, with a loss of RM3.8 million. In FY12, there seemed to be a sign of recovery again when net loss narrowed to RM519,938, but then it widened again to RM5.72 million in FY13.

For its cumulative six months ended June 30 this year (1HFY14), its net loss widened 28.3% to RM1.15 million from RM894,000 in 1HFY13, while revenue was down 75.8% to RM281,000 from RM1.16 million.

Eg, however, did not reveal how much research and development money has been spent on i-medic. Instead, he pointed out that the company is internally-funded with no borrowings. As at Dec 31, 2013, its net cash pile stood at RM770,878.

He said the company will continue to build in more components for the product, with the aim of making it a comprehensive doctor’s aide.

Currently, Palette works with over 200 doctors and specialists in hospitals in China, particularly in Beijing and Shanghai, as well as doctors in Taiwan and Singapore. “At present, we do not serve any doctors in Malaysian hospitals, as we would like to establish our product through endorsements from doctors across the globe that we serve before venturing into the Malaysian market, and we expect the Malaysian mobile healthcare market to grow in line with the global mobile healthcare market, which is expected to hit US$26 billion (RM87 billion) in 2017,” said Eg. He said the company has plans to venture into Japan and the Middle East as well. “Our product currently focuses on two languages, English and Chinese. The next market we want to focus on is the Middle East, in which there are plans for the product with an Arab language function. We hope to venture into the Middle East somewhere in the second half of next year,” said Eg.

He said i-medic’s primary target market is doctors, whom he hopes will introduce the products to their patients. “It depends on how fast the adoption rate of our target market, which are doctors, will be. Once we have gathered a few testimonials, we believe there will be an [upward] spiral,” said Eg.

 

This article first appeared in The Edge Financial Daily, on November 10, 2014.