Digital services to drive Green Packet’s profit

The company will focus on growing both fintech and proptech rapidly, and invest to capitalise on expected demand surge

by NUR HANANI AZMAN/ pic credit:

GREEN Packet Bhd expects to break even by the fourth quarter of financial year 2020 (4QFY20) and return to full year profitability in 2021, driven by digital services.

The mobile data offloading solutions provider was in the red in the first quarter ended March 31, 2020 (1Q20) with a net loss of RM34.07 million.

The group also registered total losses of over RM1 billion between FY08, and FY17.

MD and CEO Puan Chan Cheong (picture) said the company anticipates continued triple-digit growth in gross transaction value for financial technology (fintech) this year, which will make this division’s earnings before interest, tax, depreciation and amortisation (Ebitda) positive by 2021.

Investors’ interest in Green Packet swelled on the back after it bought Singapore-based e-KYC (electronic Know Your Customer) specialist firm, Xendity Pte Ltd, in mid-June for RM42.79 million.

Puan said the digital transformation among businesses and users during the Covid-19 pandemic has become a wake-up call to both government and industry players that digitisation has permeated in almost every aspect of the Malaysian economy.

“Our solution and communication will continue to be profitable. During these times, we’ve experienced a surge due to greater connectivity and communication needs.

“Digital services naturally trend upwards as the pandemic had fast-tracked demand for what we have on offer,” he told The Malaysian Reserve.

Puan founded Green Packet in 2000 and led the company to become an international player in the provision of connectivity devices and solutions to telecommunication companies globally.

Today, Green Packet is an international telecommunication and technology company which is committed to ensure every human thrives with life-improving digital innovations.

At present, Green Packet’s business portfolio comprises three segments: Solution (cellular and mobility device), communication (voice minutes and data traffic), and digital services (comprising fintech and property technology [proptech]).

This year, the solution and communication business will continue to be the main contributor to the group’s revenue where Puan expects the digital services business to start contributing significantly by 2021.

During the Covid-19 outbreak, Puan said the group experienced increased orders across all three of its major business segments of solution, communication and digital services.

Demand for the Internet and voice traffic increased substantially and on the digital services front, the gross transaction value for online payment had gone up significantly.

“Our focus will remain the same that is to grow our digital services (both fintech and proptech) exponentially and invest accordingly to capitalise on the expected demand surge due to what people are now calling the ‘new normal’.

“We want to be a key player in helping businesses and property owners restart strong and have end-to-end solutions ready for them to adapt seamlessly,” he said.

On new product development related to 5G, Green Packet has launched a series of 5G New Radio (NR) products.

“From this pandemic outbreak, it is unquestionable that the need for 5G will be greatly highlighted for remote interaction in all aspects. With its ultra-high speeds, realtime, and instant communications, 5G has made it primed for remote interactions too,” he said.

This will benefit areas like telemedicine services and teleconferencing with its reliable and highquality network.

Meanwhile, its fintech business includes kiplePay e-wallet and kipleBiz payment gateway. Puan said in 2019, the group processed a transaction volume of about RM260 million which was almost threefold more than 2018.

“On a quarterly trend, our transaction volume has increased from around RM40 million per quarter in the 1QFY19 to exceeding RM100 million per quarter this year,” he added.

KiplePay Sdn Bhd, a wholly-owned subsidiary of Green Packet is on the right track powering niches for online and offline payment transactions.

Green Packet shares closed at 66 sen yesterday, giving it a market capitalisation of RM519.66 million.