KUALA LUMPUR (May 31): Green Packet Bhd is expecting an internal rate of return (IRR) of up to 30% over the next four years for its investment in G3 Global Bhd's (formerly Yen Global Bhd) Internet of Things (IoT) business venture, which it is anticipating will break-even by the first quarter of next year.

At a press conference after the group's annual general meeting today, chief executive officer cum executive director Tan Kay Yen said he is expecting the IoT business to break-even by the first quarter of next year.

On Aug 3 last year, Green Packet announced it had acquired a 22% stake or 30.25 million shares in G3 Global at 60 sen apiece through an off-market deal, valuing the acquisition at RM18.15 million.

In the same month, Atilze Digital Sdn Bhd, G3 Global's wholly-owned subsidiary, announced it was collaborating with Axiata Group Bhd to explore and develop IoT opportunities across Southeast Asia, with an initial focus on connected car solutions and the commercialisation of city-wide low-power long-range wireless communication (LoRa) network deployments.

"Axiata is bringing a lot of regional reach to Atilze, but we do not expect to see big numbers for the time being. We think it could break-even by the first quarter of next year. Like in other business cases, we usually evaluate it based on a five-year period, and our targeted IRR [for this business] is about 20% to 30% over this period," he explained.

"Normally this kind of business starts slower, and would ramp up after that. So far, everything is on track. Even on hindsight, we have no regrets investing into it, [as] we are seeing some traction already," he said, adding that Atilze's growth will be driven by providing connected car and smart city solutions via LoRa network deployments.

For Green Packet itself, Tan said the management is expecting a revenue growth of up to 15% for its financial year ending Dec 31, 2017 (FY17).

"The improvement will continue to be driven by our core businesses, solutions and communications, our solution business is already quite geographically diversified currently. It grew from Asia towards the Middle East and Europe, before moving to the North and Latin Americas," he said.

"As for the communication business, our reach is until the Middle East now. We want to expand it further, [with the aim of achieving] a similar footprint as the solution business," he added.

Green Packet's solution business is in the design and production of carrier-grade fixed wireless modems for cellular operators. Its communication business is mainly the wholesaling of international air time to cellular operators.

The group's shares slid one sen or 2.86% to close at 34 sen today, valuing it at RM255.34 million. Its market capitalisation stood at RM255.34 million.

G3 Global's shares closed down six sen or 3.16% at RM1.84 today, after hitting its all-time high of RM1.96 on May 19. The group, which is also involved in the apparel business, has a market capitalisation of RM259.31 million.