Opensys to launch two digital products this year

PETALING JAYA: With the digitalisation of the banking sector heating up, cash recycling technology player Opensys (M) Bhd is launching two new pillars of revenue stream this year, which are its secure logistic solution Smartcit (Smart Cash In Transit) and its own white label bill payment kiosks.

In its 2019 annual report released to Bursa Malaysia on May 29, Opensys said Smartcit combined traditional CIT services with secure logistics solutions (based on the Internet of Things) to lower the cost of CIT.

Coupled with ink-staining technology, Smartcit will reduce armed-guards and save cost for its customers.

Opensys said Smartcit is currently going through customer trials.

While initially targeting the product at its bill payment kiosk customers, the Smartcit solution aims to provide a single point of cash collection and kiosk service management.

Its second product is a white label kiosk that will be digital and cost effective. This allows its customers to pay various types of bills, prepaid reloads, sales of SIM cards and digital services using e-payment (cards and e-wallets).

“Opensys is looking to deploy these kiosks at shopping malls, large residential condos and apartments, universities, colleges and LRT/MRT stations among others,”

“In addition to charging our usual transaction fee to the billers, we shall be acquiring the e-payment transactions to earn a merchant fee from the billers,” said Opensys.

The merchant fee is subject to Opensys obtaining an approval from Bank Negara.

Opensys has yet to respond to queries from Starbiz on further details of these two products.

Interest in Opensys has grown in recent times, as banks are investing in their digital strategy and are looking to digitalise their branches where labour cost can be reduced by 60%.

Currently, Opensys is the market leader in the cash recycling machines (CRM) market with an 80% share. It has installed over 3,900 CRMS since it started some six years ago in Malaysia.

Opensys started by developing proprietary software codes to enable banks that have separate computer mainframes for cash dispensing and cash deposits to use cash recycling technology.

In recent years, banks have started merging the separate functions of cash-dispensing or cash-deposit into dual-function machines called the CRM.

CRMS can accept cash from depositors and dispense them to withdrawers so that the cash is essentially “recycled”, resulting in lower cost of ownership in the area of unused cash float, cash maintenance, cash handling and space rental.

This is a savings of 25% to 30% in capital expenditure and operational cost.

There is potential in CRMS because the total installed base of CRMS now constitute about 30% of the total machine population of 17,000 units.

Besides its CRM business, Opensys provides business process outsourcing for bill payment kiosks to utility, insurance and telecommunication companies in Malaysia.

In February, Opensys launched buysolar, a one-stop online solar marketplace that enables both residential and commercial customers to purchase solar panels with the best financing options. Buysolar brings together customers, solar installers, TNB, financiers, insurers and the regulator Sustainable Energy Development Authority in the solar ecosystem onto an online marketplace platform to make purchasing and owning of solar panels easy.

As of now, Opensys has four business revenue models, namely outright sales, software services, outsourcing services and maintenance services.

For its first quarter ended March 31, 2020, Opensys’ net profit was up 9.15% to Rm1.67mil on the back of a 16.89% rise in revenue to Rm17.23mil. It declared a 0.5 sen dividend.

For its financial year ended Dec 31, 2019, net profit was up 9.32% to Rm11.14mil on the back of a 7.88% rise in revenue to Rm102.87mil.

The company is in a net cash position and presently pays dividends every quarter.

Last year, it paid out 1.5 sen in dividends thus giving it a yield of 3.3% at its current share price of 45.5 sen.

At this price, the company has a market capitalisation of Rm135.54mil.

The stock is trading at a trailing price-earnings ratio of 12 times and has a return on equity of 17.14%.

Group managing director Tan Kee Chung is the single largest shareholder with a 21.27% stake in the company.