We have barely seen the emergence of any new ACE Market listings this year, in keeping with the jaundiced perception of these companies of late.
So, when one company suddenly makes the cut, investors are naturally curious as to what the outfit is all about.
Meet Singaporean Piti Pramotedham, executive chairman and group chief executive officer of Singapore-based enterprise data management (EDM) specialist, Kronologi Asia Bhd.
Kronologi’s value proposition is simple. It is here to help companies with their risk management.
Kronologi is a specialist in data protection and is here to protect companies not just from data loss, but also to help them with business continuity once that data is backed up and restored.
Now, before one thinks that data loss only happens to other companies, think again. It isn’t just natural disasters like fires or earthquakes that create problems. Historically, simple network failures are the main reason for data loss more than half the time.
So, the issue here is when it will happen, rather than will it happen?
In a recent article by The New York Times, Howard Lutnick, the chief executive of Cantor Fitzgerald, one of the world’s largest financial services firm, said it might be callous but the first thing on his mind after the planes struck the twin towers in New York during 9/11 was passwords.
Amid the cries of fear, panic and shock, Lutnick was the one person most responsible for ensuring the viability of his company.
The biggest threat became eerily obvious. No one knew the passwords for hundreds of accounts and files that were needed to get back online in time for the reopening of bond markets.
Kronologi is no fly-by-night company. It’s been around for 12 years, with its forte in EDM infrastructure technology where it services the likes of Starhub in Singapore, Public Bank Bhd in Malaysia, PTT Exploration and Production Public Company Ltd in Thailand, Philippine Long Distance Telephone Company in the Philippines and companies within the Pertamina Group in Indonesia.
Earnings-wise, Kronologi has been growing, especially in the last three years.
Since its financial year Dec 31, 2011 (FY11), revenue had grown from RM32.78mil to RM42.17mil in FY13, representing a compounded growth of 13.43%.
During that period, net profit was almost unchanged from RM5.47mil to RM5.56mil due to the company’s expansion to new markets.
For the six months to June 30, 2014, revenue already stood at RM28.1mil on a profit of RM3.41mil.
So why has Piti, a Thai national who resides in Singapore, decided to list his company in Malaysia?
50-year-old Piti certainly has the credentials. With more than 25 years in the industry, Piti was formerly the managing director of Computer Associates Sdn Bhd (Malaysia).
Upon the listing of Kronologi, Piti will be the single largest shareholder with a 53.03% stake in the company.
In choosing Malaysia, he says simply: “We were awarded MSC status here. We believe that the MSC Malaysia status will allow us to move around technical talent between Malaysia and other countries a lot more seamlessly. The capital market structure here is also more conducive.”
Furthermore, Malaysia is Kronologi’s second largest market and a targeted market for its next phase of growth - managed EDM services.
Piti describes Kronologi’s EDM managed services as a subscription-based service, which is ideal for mid-market companies seeking low capital expenditure and IT resources solutions in terms of data protection and business continuity.
Going under the brandname Assure, it has been introduced in Singapore, and there are now plans to move that service into Malaysia, Indonesia, Thailand and the Philippines.
Response has so far been encouraging. Growth has increased from 0.85% as at Dec 31, 2012 to 5.68% for the six months to June 30, 2014.
As more companies take up Assure, Piti is looking to increase Kronologi’s recurring income. Clients who sign up for this subscription are usually tied up for 36 months.
On this note, Piti says that Kronologi is also looking for a local partner in Malaysia that could help it with data storage. It is now in talks with a few companies.
“The partner must be able to provide us with data connectivity, housing capabilities and go to markets,” he says.
Kronologi’s other growth strategy includes increasing its representation of complementary technology in the data management market space and establishing local footprints in Myanmar, Vietnam and Sri Lanka.
Due to its experience over the last 12 years, Kronologi has developed core expertise in the structured management of data protection and recovery processes for large enterprises.
For this, Piti and his co-founder, Teo Chong Meng, who is also executive director and chief technology officer, conceptualised the FABRIK framework in 2013, which includes the technology blueprint, protocols and processes that enable it to replicate, design and implement EDM services.
Kronologi plans to spend the RM17.18mil raised from its initial public offering on expansion, research and working capital.
Kronologi is making a public issue of 59.25 million new shares at 29 sen a share.
Based on FY13 numbers, this would give it a price earnings ratio of about 12 times. The company will have an enlarged share base of 236.99 million shares upon its listing.
A total of 4.74 million shares will be made available to the public; 7.11 million for eligible directors, employees and individuals who had contributed to the group’s success; and 47.4 million shares will be offered via public placement to identified investors.
“RM6mil will be for expansion in existing and developing markets, RM3.5mil for research and development, RM4.48mil for working capital and RM3.2mil for listing expenses,” said Piti at the launch of the company’s prospectus.
Kronologi is scheduled to be listed on Dec 15.
Bank Islam Malaysia Bhd has been appointed principal adviser, sponsor, sole underwriter and placement agent for the listing exercise.
Independent market research company, Smith Zander International Sdn Bhd, has forecast the EDM industry in South-East Asia to grow at a compounded annual growth rate of 7.3% from 2014 to 2016 to reach US$937.3mil (RM3bil) in 2016.
Did you find this article insightful?