Sinotop set to enter govt e-services space


  • Corporate News
  • Monday, 09 Mar 2020

For now, the MyPal portal is 80% owned by Heitech Padu Bhd.

PETALING JAYA: Fabric manufacturer Sinotop Bhd is set to enter the lucrative government e-services space as it is looking to buy a 40% stake in Dapat Vista (M) Sdn Bhd, the developer of the MyPay portal.

For now, the MyPal portal is 80% owned by Heitech Padu Bhd.

Last Jan 2019, MyPay created a stir when it announced that it would be making its foray into the government e-services space which included payment of summonses, student loans and local taxes such as assessment and quit rent.

Last Friday, Sinotop told Bursa that it had entered into a heads of agreement (HOA) with Sabri Ab Rahman to exclusively explore and negotiate further on a proposed acquisition of 30% equity interest in Television Airtime Services Sdn Bhd (TAS) from Sabri.

(At the moment, TAS owns 20% in Dapat Vista, with the remaining 80% equity interest held by HeiTech Padu.)

This 30% stake in TAS that Sinotop is looking to acquire is at a consideration of RM7mil

The RM7mil will comprise of RM5mil via the issuance of 38.46 million new shares in Sinotop at an issue price of 13 sen per Sinotop share, and RM2mil in cash.

Shares of Sinotop closed at 13 sen on volume of 88,200 shares last Friday.

Sinotop chairman Datuk Kenny Ng Bee Ken told StarBiz that Sinotop had been looking into the financial technology and digital space as a route to expand and diversify.

“Our search ended when we met TAS sometime back, where we felt this was a great opportunity via ready to go market strategies. We feel that TAS’ unique industry approach coupled with Sinotop’s commitment will further deliver online convenience via exciting products and services to all Malaysians, ” said Ng.

In the deal, there is a further proposed subscription by Sinotop and Sabri of 5.99 million and 1.02 million new TAS shares respectively at RM1.00 per TAS Share, for a total subscription amount of RM5.99mil and RM1.02mil respectively.

This is how Sinotop ends up with a 51% stake in TAS. Therefore, the total consideration for the 51% transaction is RM13mil.

However on Dec 10,2019, TAS and Heitech Padu had already entered into a sale and purchase agreement for the disposal by Heitech Padu’s 60% equity interest in Dapat Vista to TAS for RM13.5mil, together with the settlement of outstanding amount by TAS to Heitech Padu amounting to RM4mil.

Thus TAS will end up with an 80% stake in Dapat Vista.

In a filing to Bursa, Sinotop said that Dapat Vista has recently secured projects with Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) and the Courts via ‘e-Jamin’.

In the Bursa filing, Sinotop said that driven by TAS, Dapat Vista has secured a build/own/operate right to assess key government agencies via a BOO contract with Malaysian Administrative Modernisation and Management Planning Unit (MAMPU).

This was done via an open tender to access and develop small application and connection services to 370 government agencies and departments. Dapat Vista has 15-year track records and has in August 2019, launched “MyPay 2.0”, its super application as its improved new product

Dapat Vista has been involved in government SMS services for the past 15 years.

The principal activities of Dapat Vista are data analytics and software development, including to enable and facilitate e-government for agencies and departments of The Government of Malaysia.

Sinotop said that there is the prospect of the business of Dapat Vista and MyPay, being involved in the mobile technology segment which the industry is growing and evolving at an overwhelming pace around the world.

The total cash consideration of approximately RM8mil by Sinotop for the proposed transaction is envisaged to be funded by the company via internally generated funds.For its second quarter to Dec 31,2019, Sinotop recorded net profit of RM2.6mil from a previous loss of RM810,000. Revenue for this period was RM3.7mil.

For the six month period, it recorded net profit of RM4.44mil from RM548,000 previously. Revenue for the six month period was RM8.6mil.

Sinotop has a market cap of RM43.44mil based on its 394.9 million shares at a price of 11 sen.

On May 2,2019, the company had announced that it was disposing its entire equity interest in Be Top Group ltd to Gifted Investments Ltd for RM70mil, including assumptions of liabilities by Gifted.

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