ACE Market-listed Revenue Group Bhd is one of those companies seeking to benefit from the growing use of e-wallets and e-payments. The Covid-19 pandemic has spurred rapid growth of these products and services globally, Malaysia included.

       To capture these opportunities, Revenue is building what it calls a digital services exchange (DSX) ecosystem, with the aim of integrating its payment (in-house revPay platform) and non-payment services as well as inter-connecting its merchant and bank partners with fintech products and services.

       “We have a base of more than 100,000 merchants – so it makes sense for us to venture into services like e-wallet and digital insurance.

       “We are not starting from scratch – we are already 60% there,” the group’s co-founder, managing director and CEO Datuk Eddie Ng Chee Siong (pic) says.

       Ng is referring to Revenue’s stake buys in companies such as Wannatalk Malaysia Sdn Bhd, Scanpay Sdn Bhd and VSure Tech Sdn Bhd.

       Last year, the group acquired a 40% stake in Wannatalk, a company providing artificial intelligence (AI)-based products and services, for RM5mil cash. Last year also saw Revenue buying an 80% stake in Scanpay, a licensed e-money issuer, for RM1mil.

       This month, Revenue announced it is buying a 25% stake in VSure for RM12mil. VSure operates a digitalised insurance platform.

       “This is digital insurance and we will cater to the under-served market segment. It’s like the difference between a conventional bank and digital bank,” says Ng.

       A Hong Leong Investment Bank Research report in June says the acquisition of Wannatalk and ScanPay helps make Revenue a business-to-business-to-consumer (B2B2C) software-as-a-service (SaaS) provider.

       Revenue would thus be able to form partnerships with digital players to enjoy recurring revenue streams, the research house points out. “We will add value with other services like our Buymall, bill payment, logistics and insurance,” Ng adds.

       The group has a 51% stake in Buymall Services Sdn Bhd, which operates an online marketplace and provides procurement services for consumer goods from overseas e-commerce websites as well as cross-border logistics and last-mile delivery for Malaysians.

       For financial year 2016 (FY16) to FY20, Revenue recorded a five-year compounded annual growth rate (CAGR) of 24.7% in revenue and 21.6% in gross profit.

       “Unfortunately, the pandemic has impacted cross-border transactions. However, once the economy reopens, I am confident we can maintain the current CAGR numbers or do better.

       “This is why, for the past two years, we acquired stakes in a few companies – to prepare for the best to come,” he says.

       The group is also in a net cash position of RM78.5mil as of March 31, 2021, and Ng says the cash pile will be utilised “very carefully for further growth”.

       “At this moment, we do not have plans to pay dividends. We are still growing,” he says.

       As for the group’s overseas expansion plans to Myanmar and Cambodia, Ng says the pandemic has resulted in a change in direction.

       “It is not the right time to invest overseas as there are very high risks. We will focus on expanding our footprint in Malaysia.”

       Since its listing in July 2018 at an offer price of 37 sen per share, Revenue’s share price had soared to a high of RM2.31 in April this year.

       Revenue’s share price closed at RM1.93 on Aug 23. However, the stock trades at a relatively high price-earnings multiple of 75 times.

       Revenue’s business consists of three segments – electronic data capture (EDC) terminals, electronic transaction processing, as well as solutions and services.

       The bulk of its revenue comes from the EDC terminals segment, which contributed nearly 73% to the group’s revenue for its third quarter ended March 31, 2021, followed by electronic transaction processing (15%) and solutions and services (12.1%).

       For its third quarter ended March 31, 2021, Revenue posted a net profit of RM3.7mil on a revenue of RM29.1mil.

       Revenue has yet to post the results for its fourth quarter and full year ended June 31, 2021, and has been granted a one-month extension to do so.

       Ng points out that the group is looking forward to consolidating its operations under one roof within the next three to four years.

       This month, Revenue announced it is buying land in Kepong, Kuala Lumpur, for RM44mil.

       The group presently operates from six locations in the Klang Valley, with its headquarters at Kepong Business Park.

       Upon completion of the development on the acquired land, the group will cease the rental of other offices in the Klang Valley and relocate to this new premises.

       Revenue aims to convert its existing headquarters into a disaster recovery centre, which will serve as a back-up centre for its technology infrastructure and data centre.

       “We want to consolidate everything in one place for easier business management. It will take three to four years to get the new premises ready,” says Ng.