Pertama Digital looks beyond e-government space

This article first appeared in The Edge Malaysia Weekly, on January 11, 2021 - January 17, 2021.
Sabri: I don’t think we want to be known as an e-government service provider. What differentiates us from our peers is that we don’t seek government contracts. (Photo by Mohd Izwan Mohd Nazam/The Edge)

Sabri: I don’t think we want to be known as an e-government service provider. What differentiates us from our peers is that we don’t seek government contracts. (Photo by Mohd Izwan Mohd Nazam/The Edge)

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WHEN Pertama Digital Bhd announced plans to acquire a 51% stake in Television Airtime Services Sdn Bhd (TAS) last year, many in the investing fraternity wondered whether the company would become the next My EG Services Bhd.

That is because TAS owns a controlling stake in Dapat Vista (M) Sdn Bhd, a technology-driven home-grown company that specialises in mobile technology and digitalisation of government services.

According to Pertama Digital executive director Sabri Abdul Rahman, however, the group is looking beyond the e-government space, as it hopes to transform itself into a government technology (govtech) company.

“The future direction of Pertama Digital is very clear. We intend to create or identify and invest in more companies such as Dapat Vista. Our group’s main objective is to provide digital solutions to the rakyat to access government services,” he tells The Edge in an interview.

Sabri, 61, assumed his current post last November. He also owned 4.26% of the Main Market-listed group’s shares as at Nov 11, 2020 and has a 49% stake in TAS.

In 1992, Sabri founded TAS, which provides TV programme content, advertising and broadcasting services, before he started Dapat Vista in 2000. Interestingly, Dapat Vista is jointly owned by TAS and HeiTech Padu Bhd, another Main Market-listed IT systems integrator.

Currently, TAS owns a 56% stake in Dapat Vista, with the option to purchase a further 24% stake from HeiTech Padu. If and when TAS does so, HeiTech Padu’s shareholding in Dapat Vista will be reduced from 44% to 20%.

“When I look at what Pertama Digital wishes to accomplish in years to come, I don’t think we want to be known as an e-government service provider. What differentiates us from our peers is that we don’t seek government contracts. We identify gaps and problems, we develop solutions, and we propose to the government in a manner that it disrupts for improvements,” Sabri says.

Before its name change last September, Pertama Digital was known as Sinotop Holdings Bhd, a China-based fabric and textile manufacturer. In the financial year ended June 30, 2020 (FY2020), the group returned to the black with a net profit of RM2.03 million, compared with a net loss of RM73.87 million in FY2019, even though its revenue came in 46.7% lower at RM8.65 million.

The group saw the emergence of Datuk Abdel Aziz @ Abdul Aziz Abu Bakar as its substantial shareholder with a 6.92% direct stake last May. Between March and June last year, Chinese national Pan Dong, Noble Pinnacle Sdn Bhd — co-owned by Datuk Soo Sze Ching and Lim Yoke Eng — and Taiwanese Hsu Ching-Fu had ceased to be the substantial shareholders of Sinotop.

Today, Pertama Digital, through Dapat Vista, provides solutions in mobile and web apps, mobile payment, messaging as well as other customised digital services and products. It also operates the mySMS gateway and the MyPay and eJamin apps.

For perspective, all the legacy textile businesses of Sinotop are in the midst of being hived off, as Pertama Digital will be focusing on the digital and mobile space.

Sabri is confident that the group’s offerings will eventually be much more than other industry players, as he believes in the “do first, ask later” approach.

“The intention is always about us pleasantly surprising the market with our solutions. The business will come later when the clients find that we have a creative solution. We have the potential of servicing all the 374 government agencies in Malaysia. In other words, we have 374 chances of getting creative and providing solutions,” he says.

Sabri adds that as long as the public wants convenience when dealing with these government agencies, Pertama Digital will be able to identify the business opportunities. “Our immediate target is to enrol about 30 government agencies, which is about 10% of the total. We will be targeting high-traffic government agencies such as JPJ (Road Transport Department), JPN (National Registration Department), LHDN (Inland Revenue Board) and the Royal Malaysia Police,” he notes.

Sabri cites Dapat Vista’s eJamin, a solution enabling digital payment of bails.

“If you need to pay bail, instead of going to the banks, you can settle the payment online and the court would release the person in custody immediately. Our business model is quite unique. In fact, we never ask the government or the public to pay us. We work with the banks, and we charge a fee only when there is a transaction,” he says.


Aiza says as people nowadays have the power of choice, the group has to widen the options of digital platforms as a means to deal with government agencies (Photo by Mohd Izwan Mohd Nazam/The Edge

Pertama Digital CEO Aiza Azreen Ahmad points out that, as people nowadays have the power of choice, the group has to widen the options of digital platforms as a means to deal with government agencies.

“We want to solve the problems that have existed for a long time. If you look at the conditions of certain government agencies today, it still [involves] going to the counter and putting it all on paper. There is no digitalisation at all. So, there are a lot of opportunities for us,” she says.

Aiza adds that even getting a MyKad, applying for tertiary education and financing or getting married could be a problem during the Covid-19 pandemic. “In the future, we need to find ways to cut short these processes. As our listed company’s name suggests, we are ‘digital first’. We kind of own that space because of our birth name,” she says.

Coin recovery

It is worth noting that Pertama Digital recently launched the MyPay coin-deposit feature, which aims to help bring billions of ringgit worth of coins back into circulation.

The group is collaborating with Hektar Asset Management Sdn Bhd, the manager of Hektar Real Estate Investment Trust (REIT), which will be supporting its MyPay coin-deposit feature by making available locations within its retail premises as coin-deposit points.

Hektar REIT is Malaysia’s first retail-focused REIT. Its portfolio includes assets in Kedah (Central Square and Kulim Central), Johor (Classic Hotel, Segamat Central and Wetex Parade), Melaka (Mahkota Parade) and Selangor (Subang Parade).

On the coin-recovery project, Aiza says Pertama Digital intends to play a part in accelerating the country’s aim to become a cashless society, which is an area that Bank Negara Malaysia has been pushing very hard.

“The way we see it, what is [preventing] people from going cashless is the coins. Today, we have billions of physical coins worth about RM3.6 billion (as at September 2020) circulating in the market. Bank Negara wants these coins recovered. The government realises that the cost of producing coins is about RM120 million every year,” she says.

Aiza discloses that Pertama Digital has started talking to shopping malls as well as telecommunications and digital players, all of which are keen to participate in the coin-recovery project.

“We want to stop the coins from being manufactured and encourage people to go cashless. There are a couple of ways to do this. So, that’s people on the ground doing that.

“Meanwhile, we could deploy our agents and foot soldiers to accelerate the coin recovery. We are passionate about this project. We want micro-businesses to participate in the digital economy as soon as possible.”

Over the past 12 months, shares in Pertama Digital have almost tripled. The stock closed at 42 sen last Thursday, giving the company a market capitalisation of RM182 million.

 

 

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