Sedania Innovator poised for earnings boost with As-Sidq FinTech platform

KUCHING: Sedania Innovator Bhd (Sedania Innovator) is poised for an earnings boost in the financial year ending December 31, 2017 (FY17) with the acquisition of Islamic FinTech platform provider Sedania As-Salam Capital (SASC).

At the Extraordinary General Meeting on Monday, shareholders approved the acquisition of SASC for purchase consideration of RM12 million, whereby RM4 million will be satisfied by cash, and RM8 million via issuance of 25.8 million new shares at RM0.31 each.

Since 2010, SA SC provides the AsSidq system, aT aw arruq commodity trading system that utilises prepaid telecommunication airtime credit as the traded commodity based on Shariah principles. The electronic and fully-automated As-SidqTM system is currently utilised by 21 financial services companies in Malaysia, including financial institutions and cooperatives, to facilitate Islamic financing to customers.

To date, As-Sidq has processed more than 300,000 personal financing transactions with total worth of more than RM25 billion.

Under the acquisition, SASC would provide a minimum profit guarantee of RM1.5 million per year for two financial years ending December 31, 2017 and 2018.

Datuk Azrin Mohd Noor, managing director of Sedania Innovator Berhad said the acquisition allows Sedania Innovator to now bring this proven and emerging FinTech platform to revolutionise the Islamic banking sector, not just in Malaysia but also beyond our shores.

Being a part of a listed entity would boost confidence in As-Sidq amongst current and potential clientele, and open the door to offer beyond personal financing, into hire purchase, mortgage, credit card as well as deposits.

“We are actively engaging with various financial institutions, and target to increase our customer base from 21 to 25 by year-end to further strengthen our position as Malaysia’s premier FinTech player in the Islamic banking sector.”

The acquisition is expected to be completed within the third quarter of 2017, and contribute positively to Sedania Innovator in the second half of FY2017 onwards.

According to the independent market research report, the personal financing market under the Islamic banking system in Malaysia was valued at RM28.8 billion in 2016, amounting to 41.7 per cent of the total personal financing market.

Industry reports have also indicated Islamic banking’s growing popularity across other sectors, where the deposits segment was expected to reach RM2.2 trillion by 2020, mortgage and hire purchase valued at RM327.3 billion, and credit card at RM3.7 billion by the same time.

Datuk Azrin said that Sedania Innovator’s entry into the FinTech space formed one of the Group’s pillars in empowering users with cutting-edge technologies.

“With FinTech now in place, our growth will be propelled by this emerging technology alongside other existing components of AirTime Share, Internet of Things, Green Technologies and Big Data Analysis.

Sedania Innovator has now entered our high-growth phase to sustain our performance going forward,” concluded Azrin.