Kronologi Asia optimistic of double-digit earnings growth

KUALA LUMPUR: Kronologi Asia Bhd which saw a 32.9% increase in its net profit for the fourth quarter to RM3.44 million from RM2.59 million a year ago on the back of contributions from its Indian subsidiary, Quantum Storage (India) Pte Ltd, is eyeing double-digit growth in earnings this year.

Its revenue for the quarter under review grew by 56.8%, to RM42.74 million from RM27.27 million.

Meanwhile, the enterprise data management firm saw a 68.5% growth in its full-year net profit, which rose to RM12.1 million from RM7.16 million.

The group’s revenue for the financial year ended Dec 31, 2017 increased to RM144.37 million from RM81.28 million, was driven by contributions from its EDM Infrastructure Technology Division.

In December, Kronologi completed the RM45 million acquisition of Quantum Storage (Hong Kong) (QSHK) Ltd, from which it recognised one-month’s contribution in the past financial year.

“Even if everything is status quo without Hong Kong, logically speaking it will be a double-digit growth, barring any unforeseen circumstances, it (QSHK) should contribute to a double-digit growth for 2018,” said the group’s executive director Tan Jeck Min at a media briefing held in conjunction with the announcement of its financial results.

The group’s share price has gained 123.6% in the last one year. Yesterday it closed up five sen to 80.5 sen with some 15.8 million shares changing hands.

On its Indian unit, for which it completed acquisition in the fourth quarter of 2016, Kronologi’s executive director and acting CEO Philip Teo said that given the Narendra Modi led government’s push for smart cities, the market holds a lot of growth potential, particularly for its video surveillance product.

On whether there are more acquisitions on the cards, Teo said there are no material developments at this juncture.

“If there are opportunities which has synergy with what we are doing and if it can add value to our group, it will definitely be something we will be looking at,” he said.

Last year, it was reported that the group will be looking towards artificial intelligence (AI) sector to enhance its growth.

“AI is still a practice that we are developing. There are still some work to be done in that space and it is still a key area for us that we are looking at,” he said.

The products are there but the market acceptance is still not as broad as we would like and there is still a lot of education that is required at this stage,” he added.