Orion IXL a fintech giant in the making?

MDV will extend its product offering to venture financing and support on-going fintech initiatives.

KUALA LUMPUR:  ACE Market listed company Orion IXL , which specialised in the fintech space, has first-mover advantage in the country as a pioneer in providing fintech solutions for non-bank financial institutions (NBFI) and related industries.

CIMB Equities Research said on Monday Orion's core competencies are big data, artificial intelligence and blockchain technology.

Orion has developed a fintech solution specialising in financial transaction management, using the latest technology such as big data, artificial intelligence (AI) and blockchain. 

Apart from being applicable in finance-related industries, its core big data and AI engine can be independently used for various other industries. Orion is also involved in designing and retailing computerised maintenance management system (CMMS).

To recap, in Oct 2018, Orion got a big break in the big data and AI space when its 20%-owned Sukaniaga Sdn Bhd inked a service level agreement with MyAngkasa Holdings. 

The agreement entails Sukaniaga providing a fintech end-to-end loan application and approval system called “MyAngkasa Az-Zahara” (MyAzZahra), MyAngkasa is a subsidiary of the ANGKASA, the apex organisation for the co-op movement in 

Malaysia, with 14,000 co-ops and 6.5m members as at end-2017. Orion gets a fee of 1.275% on loans approved via MyAzZahra

CIMB Research said under the service level agreement, Orion’s unit Ganda Integrasi Sdn Bhd (GISB) will provide the MyAzZahra system to Sukaniaga. 

For every loan approved via MyAzZahra, Sukaniaga is entitled to 1.5% of total loan amount approved, while Sukaniaga will allocate 85% of its billings (1.275% of total loan amount) to GISB.

According to Orion, the MyAzZahra system is based on blockchain and big data analysis, and will incorporate an in-house credit rating engine based on AI.

Over the next few months, the company plans to focus on the eight to 12 largest credit co-ops that are responsible for around 80% of total co-op lending nationwide. 

By end-2019F, Orion aims for MyAzZahra to be linked with most, if not all, of the 12 largest credit co-ops in the country. 

According to the Co-operative Societies Commission of Malaysia (SKM) the country’s credit and non-credit co-ops lent out RM6.7bn in 2017, comprising mainly personal loans to government staff.

Orion said that it aims for MyAzZahra to deliver pretax margin of 35%-40%. 

CIMB Research said if the MyAzZahra fintech system handles RM1bil to RM5bin loan approvals for the co-ops over the next 12 months, Orion estimates this segment could record pretax profit of RM9.1mil to RM29.5mil in CY19F.