- \n
- Lowest valuation among the peers<\/li>\n
- Net cash company with strong growth momentum<\/li>\n
- To offer cloud-based solutions for business sustainability and recurring
\nincome<\/li>\n<\/ul>\n
\n <\/p>\nKUALA LUMPUR, MALAYSIA<\/span>\u00a0<\/b>–\u00a0Media
\nOutReach<\/a>\u00a0–\u00a023 February 2021 –<\/span>\u00a0<\/b>In
\nthe past three financial years, ARB Berhad<\/a><\/b>
\n(“ARB” or “Group”) has
\nnot only staged a very successful turnaround but has also consistently
\nregistered substantial net profit growth. As recent as the fourth quarter of the
\nfinancial year 2020, the Group achieved a massive leap of 55% in the bottom
\nline.<\/p>\n![](\"https:\/\/release.media-outreach.com\/release.php\/Images\/Thumb\/500x0\/125889\/arb-image.jpg#image-125889\")
<\/p>\nARB Berhad’s Executive Director Dato’ Sri Larry Liew Kok Leong at a monthly business plan review meeting<\/h5>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nThe Group’s success in breaking away
\nfrom its decade-long losses lies in its strategic diversification into the
\nfield of enterprise resource planning (ERP) and Internet of Things (IoT)
\nsolutions.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nTo date, ARB is amongst the lowest in
\nterms of valuations when compared to its peers in the technology sector. The Group
\nhad also managed to deliver meaningful growth to its shareholders despite facing
\nthe negative influence of the pandemic.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nARB is in a net cash position, with cash
\nand cash equivalents worth RM24.5 million against zero borrowings as of 31
\nDecember 2020.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nLooking ahead into 2021 and beyond,
\nARB’s upward growth momentum is poised to continue, underpinned by the immense
\npotential in digitalisation among businesses and the Industry 4.0 agenda.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nAfter posting its record-high net profit
\nin the financial year of 2020 (FY20), the Group is confident of achieving a more
\nrobust performance in the current FY21.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nARB’s Executive Director Dato’ Sri Larry
\nLiew Kok Leong said that the Group aims to expand its geographical presence and
\naccess various new industry sectors by taking advantage of cross-border
\nbusiness opportunities in 2021.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\n“In line with our regional expansion
\nplan, we intend to collaborate with local partners to extend our footprint in
\nour information technology (IT) Segment in other countries through the acquisition
\nof business and technologies,” he said.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nA key growth strategy for 2021 would be
\nARB’s move in providing more cloud-based product offerings, which would be
\nachieved through the execution of partner-ecosystem in growing industries.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nAt the domestic front, Dato’ Sri Liew
\nsaid ARB plans to work closely with government-linked companies, multinational
\ncorporations and public listed companies as envisaged under its 2021 business
\nplan.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\n“Our cloud solutions have proved to
\nimprove management efficiency and accelerate a business’ digitalisation
\ninitiatives. At the same time, the solutions would also help to achieve cost-effectiveness,”
\naccording to Dato’ Sri Liew.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nMoving forward, the Group also intends
\nto expand into new horizontal markets such as providing cloud-based solutions to
\nfacilitate the new norm of business needs.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\n“As part of the growth strategy driven
\nboth organically and through strategic acquisitions, we are delivering
\ninnovative solutions in new categories, including Big Data analysis, e-commerce
\nsolutions, IoT platform for 5G and data cybersecurity, and expect to continue grow
\nthese businesses in the future,” said Dato’ Sri Liew.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nHe added further that the Group will
\naccelerate rolling out IoT platform-based smart home solutions that have been
\ngaining traction, especially among households in the urban area.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nARB’s IoT platform would be able to
\nintegrate a wide range of electrical appliances, allowing multi-connection and
\nreadiness of artificial intelligence learning features for the ease of use of home
\noccupants.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nAccording to Dato’ Sri Liew, ARB’s
\ngrowth prospects are intact as it is well-positioned in two promising operating
\nsegments, namely, ERP and IoT. Our ERP and IoT segments will drive alignment,
\nfocus and growth while sharpening our partners’ focus. In addition, we
\nare excited to see our IoT solutions business return to growth by serving more
\nenterprises, further building on our annualised recurring revenue.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nBased on the statistics by Frost &
\nSullivan, the Malaysian IoT market is expected to grow at a compound annual
\ngrowth rate (CAGR) of 24.7% from US$2.2 billion in 2019 to reach US$10.3
\nbillion by 2026.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nMeanwhile, the Malaysian ERP market is
\nprojected to grow from US$120 million to reach US$255 million in 2026, growing
\nat a CAGR of 11.4% in the same period.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\n“ARB’s unique cloud-based ERP business
\nmodel reduces the Group’s dependence on external technology vendors and allows
\nit to capture a bigger share of the value pool generated from the collaborations.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nDato’ Sri Liew expects the ERP segment
\nto remain as the main revenue contributor for ARB in FY21, with continued
\nrecurring income potential.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nThe ERP segment is expected to deliver
\n65% of total turnover, while the remaining will be contributed by the IoT
\nbusiness. Both segments are expected to be in line with the global initiative
\nin advancing into the new era of Industry 4.0.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\n“We create value by providing a
\ntailor-made solution for our JV partners, designed to generate an immediate
\nimpact on sales and profits. At the same time, it also improves our business as
\nwe allow our JV partners to cross-sell their products and upsell packages to
\nend customers, hence creating a synergistic relationship,” he added.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\n“The Group will continue to look for
\nopportunities that might open up amidst the crisis, \u00a0observe the market situation and adapt to what
\nis needed in the current market to ensure the sustainable growth to the Group,”
\nDato’ Sri Liew said.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nIn FY20, the Group’s net profit grew by
\nnearly 25% year-on-year (y-o-y) to RM43.46 million, on the back of a 114% surge
\nin revenue to RM219.45 million. It staged a turnaround in FY18 with a net
\nprofit of 4.23 million and continued to grow its bottom line to RM32.8 million
\nfor FY19. The Group has continually achieved its steady three-year earnings
\ngrowth in revenue and net profit since 2018.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nWith 2021 set to be a year of recovery,
\nunderpinned by an improvement in business sentiment, ARB’s outlook appears to
\nbe positive.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nARB would be a key beneficiary of an
\nincrease in capital expenditure among businesses to digitalise their internal
\noperations.<\/p>\n
\n <\/p>\n\u00a0<\/p>\n
\n <\/p>\nCurrently, the Group has one of the
\nlowest price-to-earnings ratios in the technology sector at just 4.6 times as
\nof 22 February 2021 as compares with other technology industry players such as
\nMi Technovation Bhd (64.4 times), Inari Amerton Bhd (63.5 times) and ViTrox
\nCorp Bhd (88.8 times).<\/p>\n