SINCE listing on the ACE Market of Bursa Malaysia in June 2015, technology company Sedania Innovator Bhd has lost some RM62 million, or a whopping 72%, of its market capitalisation.
The poor performance of its share price can be attributed to its lumpy earnings over the past 3½ years.
The tech firm reported a net profit of RM1.8 million in its financial year ended Dec 31, 2015 (FY2015) but slipped into the red with a net loss of RM1 million in the following year. Although it returned to the black in FY2017 with a net profit of RM1.6 million, it bled RM1.2 million in the nine months ended Sept 30, 2018 (9MFY2018).
In its initial public offering (IPO) in 2015, Sedania had offered its shares at 38 sen apiece, raising RM19.56 million in total.
But last Friday, the stock closed at 10.5 sen, giving the company a market cap of RM23.7 million. Given Sedania’s current base of 225.81 million shares, its market cap could revisit RM85.8 million if its share price improves to its IPO level.
This is exactly what CEO Daniel Bernd Ruppert is aiming for in the next two years. “This could happen as early as this year or next year, depending on how quickly our new products are adopted by the market,” he tells The Edge.
“Although our share price is low now, I believe Sedania can create more shareholder value by innovating new products. Time will prove this,” the 42-year-old German states confidently.
Founded by media and telecommunications industry veteran Datuk Noor Azrin Mohd Noor, Sedania focuses on five areas: financial technology (fintech), green technology (greentech), airtime sharing platform, the Internet of Things (IoT) and big data analytics.
Noor Azrin, who controls 55% of Sedania, was head of entertainment and sport at Astro in the 1990s. He “pioneered” the English Premier League, FIFA World Cup and the UEFA Champions League for the pay-TV station, earning him the nickname “Father of Football”.
Ruppert, who has helmed Sedania since January last year, has 18 years of experience in banking and retail, including a stint in London-based Jefferies Financial Group Inc as an investment banking analyst.
Acknowledging that FY2018 was a highly disappointing year for the tech firm, he says he is hopeful that Sedania’s fintech, greentech and IoT divisions will take a big leap forward this year on the back of their investment in R&D last year.
“Sedania has an advantage (in) that we are diversified with recurring income from at least three major business segments. Now, with our new consumer products coming into the market, Sedania will not only be standing on firmer ground but also taller, making us more visible in the market,” he says.
In fintech, Sedania will be launching two new products that will “revolutionise” the financing approval process for businesses and consumers in Malaysia.
Ruppert stresses that it is imperative to finance small and medium enterprises (SMEs) as they are the backbone of Malaysia’s economy and employment market.
“Fintech is already a buzzword and it will become even more important. Financing for SMEs will be key but, ironically, money is not the issue. It is disbursement.”
Ruppert observes that Malaysia’s current financing methodologies are outdated — too slow, inflexible, ineffective and too expensive.
Sedania started a new predictive credit-scoring engine to help financial institutions (FIs) evaluate the creditworthiness of business owners and consumers, and to accelerate the approval and disbursement process.
“Instead of looking only at single data points within your credit history via the outdated reports from credit-rating agencies, our artificial intelligence (AI) engine looks at you as a person holistically, including (your) social reputation, psychometric assessment and user behaviour analytics,” Ruppert explains.
This engine will be available in two products — Ifinex and Ulendoo.
Ifinex is a financing platform that allows consumers to apply for Islamic personal finance and to receive offers from multiple FIs. It is fully transparent, online and integrated with the FIs to ensure cost and time-efficient disbursement.
Ulendoo provides micro loans to consumers and is instant, app-based and collateral free.
“Ulendoo will serve customers that are looking for small loans of between RM100 and RM1,000. These loans will be approved based on creditworthiness scores generated by our AI-driven scoring engine,” says Ruppert.
As for greentech, Sedania will offer energy-efficiency technologies combined with IoT and smart controls.
“Our clients — banks with many branches, retail chain stores or smart cities — have enormous energy bills every year. Such expenses are not only recurring but also rising. If we can save you 30% of your monthly energy bill without capital expenditure, who wouldn’t want to do that?” he asks.
Ruppert maintains that Sedania can convert bank branches into energy-efficient premises, providing the banks with energy savings of up to 30%.
“If you add up the branches, this becomes a substantial amount of money. On top of organic growth, we are also actively expanding this segment by looking into acquisition candidates to boost executional power,” he adds.
Sedania has also entered the B2C (business to consumer) space with a smart fire alarm solution for commercial and residential buildings, which will be launched in Malaysia and Singapore.
“This IoT-based fire alarm is monitored 24/7 by us. We notify you, your family members, neighbours and, ultimately, the bomba — even if the user is asleep in another room or not at home,” Ruppert says.
This article first appeared in The Edge Malaysia Weekly, on February 11, 2019 - February 17, 2019.