Kronologi to raise funds for expansion
Enterprise data management company intends to start exercise in the current quarter
KUALA LUMPUR: Enterprise data management (EDM) firm Kronologi Asia Bhd plans to raise funds to meet the capital requirements of its regional expansion plans in the medium-term.
While there are no indications if the Ace market-listed group is raising funds via the capital market, internally-generated funds or bank borrowings, acting CEO and chief technology officer Philip Teo said that Kronologi would commence the fund raising exercise during the current quarter.
“Our regional expansion entails organic growth, merger and acquisition (M&A) activities, emphasis on the EDM services as well as widening our market penetration in India,” he told StarBiz.
Besides India, the group is present in Singapore, Malaysia, Indonesia, Thailand and the Philippines.
The group is on the lookout for potential M&As, although discussions are in the preliminary stages.
Kronologi’s business is divided into two segments – the EDM infrastructure technology under the Quantum brand and EDM services under the Kronicles brand.
Between the two, the EDM infrastructure technology segment is the larger contributor to the group’s revenue, at an estimated 90%.
As Kronologi is under-represented in the EDM services segment, the group intends to capitalise on the recent ransomware attacks.
Although Kronologi does not primarily deal with cyber security, clients can leverage on Kronologi’s EDM services.
“The recent cyber attacks highlighted the need for specialised data storage and back-up solutions which are more secure and easily-accessed on premise or over the cloud.
“Companies are spending more on disaster recovery and continuity to minimise business interruption,” said Teo.
Besides data protection, Kronologi intends to expand its services to include enterprise file sharing-as-a-service, archive-as-a-service, disaster recovery-as-a-service, and e-vaulting.
E-vaulting is a process which allows clients to store their tape backups, under the Kronicles infrastructure for quick data restoration.
After completing the acquisition of Quantum Storage (India) Pte Ltd (QSI) last October, Kronologi aimed to strengthen their presence in India.
QSI came with an annual profit guarantee of US$1mil in financial years 2016 and 2017.
For the first quarter ended March 31, Kronologi registered a net profit of RM2.04mil, a 49% growth from the corresponding quarter last year.
According to a filing with Bursa Malaysia, the higher profit was due to a 78% increase in revenue during the quarter, as well as recognised deferred tax assets arising from a temporary difference on utilised capital allowance.
The revenue of RM25.19mil recorded during the quarter included contributions from Kronologi’s wholly owned subsidiary QSI.
However, bulk of the revenue contribution to Kronologi was derived from its Singapore operations, at 54% of the group’s total revenue.
As of March 31, Kronologi’s cash and bank balances rose to RM10.9mil from the previous quarter’s RM8.3mil.
Its earnings per share on a fully diluted basis rose to 74 sen during the quarter.
On a year-to-date basis, the stock rose 52% to 47 sen as of last Friday.
Kronologi has a market capitalisation of RM127.08mil and is trading at a price-earnings multiple of 15.16 times.
In an effort to have additional points of presence, Kronologi will establish more managed services centres across Malaysia and Hong Kong.
The group’s main managed services centre is currently based in Singapore. Companies prefer to have their data backed-up in an additional centre in another country or in more than one location within a country to mitigate risks from disasters.