PETALING JAYA: Securemetric Bhd has set its sights on becoming a major digital security player across South-East-Asia, by banking on its regional expansion strategy and the synergistic benefits from its new substantial shareholder – China’s Feitian Technologies Co Ltd.
The ACE Market-listed company, which went public in November 2018, also expects its future growth to be driven by its increasing client base and the company’s soon-to-be-launched pay-per-use business model.
Group chief executive officer Edward Law told StarBiz that with Feitian Technologies as its partner, Securemetric plans to venture into new South-East-Asia markets namely Myanmar, Thailand and Cambodia.
At present, aside from Malaysia, Securemetric has presence in Indonesia, Singapore, the Philippines and Vietnam.
“We will be leveraging on Feitian Technologies’ products to enter these new markets.
“With Feitian Technologies’ strong competence in digital security hardware, we see high potential for us to do more cross-selling by bundling some of its hardware devices with our digital security solutions for projects in this region.
“Feitian Technologies has strong know-how in digital security hardware development while Securemetric’s core expertise lies in digital security software. We foresee a lot of synergies between both parties and are confident this collaboration will contribute positively to both parties,” said Law.
According to Feitian Technologies’ website, it has been “the No.1 supplier of user authentication and transaction security” for China’s online banking segment. Globally, its international business has served customers in over 100 countries.
Feitian Technologies emerged as Securemetric’s new substantial shareholder in March this year, after it acquired an 8.2% stake in the digital security player through an off-market deal.
For context, both companies have had a long working relationship prior to the acquisition of equity interest.
In an earlier report by StarBiz, Feitian Technologies’ chief financial officer Zhu Bao Xiang had indicated that the firm may increase its stake in Securemetric, if the opportunity arises.
Law said that the new direction and policies by the governments in the region that are leaning towards the strengthening of cyber-security provide promising opportunities for Securemetric to expand its footprint in South-East Asia.
They include the introduction of Risk Management in Technology (RMiT) guidelines by Bank Negara, which is applicable to financial institutions.
“The implementation of RMiT brings highly positive prospects to cyber security industry and to Securemetric.
“Our core offerings in the digital security solutions and domain expertise in the area of public key infrastructure, Crypto Key Management, Mobile Application Security, Stronger User Authentication, Certificate Lifecycle Management can perfectly help financial institutions to comply with this policy,” he said.
Moving forward, Securemetric is looking to generate a stronger and sustainable recurring income stream to reduce dependency on contract-based revenue.
In line with this, Law said the company’s first “Security As A Service” pay-per-use business model will be introduced in the third quarter of financial year 2019.
Within the next five years, Securemetric expects 50% of its top line to be contributed by the recurring income stream.
“In fact, one of the key reasons we decided to go for listing is to establish a solid funding platform to enable Securemetric to carry out aggressive diversification into offering ‘Security As A Service’”.
“We had identified a few key security services that we are confident could bring highly positive prospects to the company in the long run.
“The first three “Security As A Service” currently in our pipeline to be launched are “Authentication As A Service”, “Mobile Application Security As A Service” and “Digital Signing As A Service”. All the managed services will be offered by following the ‘pay-per-use’ model,” he said.
Year-to-date, the stock has risen by about 39% to 55.5 sen. Listed on Nov 13, 2018 with an issue price of 25 sen, Securemetric focuses on software licensing protection, two-factor authentication, advanced identity and access management, public key infrastructure and cryptography.