KUALA LUMPUR (May 9): Autocount Dotcom Bhd made its debut on the ACE Market on Tuesday (May 9).
The company opened at RM1.09 against its IPO price of 33 sen a share — a premium of 76 sen or 230.3% over its 33 sen reference price.
The counter closed at 75 sen on its maiden trading day — a 127.27% or 42 sen jump over its IPO price — with a market capitalisation of RM 412.88 million.
It was the top most active counter on Bursa Malaysia with 277.31 million shares traded upon closing.
The company has yet to announce a dividend policy, but its managing director Choo Yan Tiee has said the initial focus would be on its expansion. Cash would also be reserved for advertising and promotional costs.
A developer and distributor of financial management software that includes accounting, point-of-sale (POS) and payroll, Autocount said it has sold approximately 70,000 software licenses for use of approximately 210,000 businesses and companies in Malaysia and Singapore.
In a press conference following the listing, Choo said the company has begun its localisation and surveying of offices in several Asean countries.
"By next week, we are making our trips to the Philippines, followed by Thailand, then Vietnam by the end of the month and Indonesia," he said.
He added that the company will be discussing with the appointed recruitment agencies in each country and hopes to hire an additional seven employees. The entire expansion is expected to not take more than three years.
Choo said the company will proceed on its own in the targeted countries, and not via joint ventures. "Once we have opened our offices, we will appoint our dealers there," he said.
A majority of the proceeds — RM17.3 million or 56% — was earmarked for expansion while RM5.2 million (17%) was allocated for research and development in expanding its existing product features such as enhancing its cloud POS, cloud accounting, cloud payroll, e-commerce solutions and human resources.
Meanwhile, RM4.42 million (14%) will be used for the company's working capital and RM3.9 million (13%) for listing expenses.
Choo said hiring engineers and programmers is crucial and the company has good relationships with local universities, including Universiti Tunku Abdul Rahman (UTAR), with a view to increasing its skilled personnel.
"From time to time, we have recruited a lot of their intern students," he added.
Autocount's IPO consisted of a public issue of 93.59 million new shares or 17% of its enlarged share base of 550.5 million shares, and an offer for sale of 44.04 million shares (8%).
The company posted a net profit of RM3.66 million in its first quarter ended March 31, 2023 (1QFY2023) on the back of RM10.42 million in revenue.
Its Malaysian market contributed RM7.39 million or 70.96% of total revenue, followed by its Singapore segment, which recorded a revenue of RM3.01 million or 28.92% of total revenue.
Asked about potential foreign exchange losses from its Singaporean segment owing to the weak ringgit, sales and marketing director Ng Boon Thye said it has minimal impact on the company's financials.
"The foreign gain/loss is not significant at all, because we are not doing trading," Ng observed, adding the company will continue to target small and medium enterprises (SMEs).
"We will still maintain our focus on SMEs," said Ng, "In the future, with advanced features, we may cater to medium and high [enterprises] but our focus is still on SMEs. We tried to build as many applications that can bring value to SMEs to penetrate the market."
He further added that the upcoming e-invoice by the government would drive revenue and sales growth as businesses find solutions in digital adoptions.
"It will be good if the government provides some grants to help the SMEs in decreasing their burdens when they migrate to a new software," he remarked, adding the company has experience working with the Singapore government in e-invoicing for the past five years.
Earlier on Tuesday, Hong Leong Investment Bank Research valued the company at 56 sen and said it was set to capitalise on the increasing digitalisation trend among SMEs in Malaysia and Singapore.
Apex Securities had set a target price of 59 sen for the stock based on 17 times price-earnings ratio (PER) of Autocount’s FY2024 forecast earnings per share of 3.5 sen, which is at a 15% premium to its peers’ forward PER of 15 times.
Malacca Securities Sdn Bhd was the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.
Read also:
HLIB Research values ACE Market-bound Autocount Dotcom at 56 sen
ACE-Market bound Autocount’s IPO oversubscribed by 167 times
Apex Securities values ACE Market-bound Autocount Dotcom at 59 sen
ACE Market-bound Autocount posts 1Q net profit of RM3.66 mil
ACE Market-bound Autocount to price IPO at 33 sen per share to raise RM30.88 mil