Rebound in cash recycle machine segment expected to drive OpenSys' earnings growth

TheEdge Wed, Oct 12, 2022 04:30pm - 1 year View Original


KUALA LUMPUR (Oct 12): Financial services, telecommunications, and utilities solutions provider OpenSys (M) Bhd is banking on a rebound in its cash recycle machine (CRM) business segment to drive earnings growth.

Speaking at a press conference on Wednesday (Oct 12), OpenSys chief executive officer Eric Lim said the CRM business, which contributes up to 30% of its total revenue, rebounded strongly in the last four quarters following a "pause" due to the Covid-19 pandemic.

The group claims a lion's share of over 80% of Malaysia's CRM market.

"There are about 16,000 cash machines including automated teller machines in the market right now, and out of that, around 5,500 to 6,000 are CRMs. So potentially, [there are] 10,000 machines we can replace with CRMs.

"Additionally, our own machines that we have deployed to some of the banks, [were] like seven to eight years ago. It is also kind of time for them to replace it because such machines, their lifespan is usually around seven to eight years.

"[As such,] we actually have our own replacement market. Typically we do about 500 to 600 units a year," he said.

Other than CRMs, Lim noted OpenSys' other business segments like bill payment kiosks and maintenance businesses comprise the remaining 70% of group earnings.

Its customer base includes a number of large companies such as AEON Credit Service (M) Bhd, Affin Bank Bhd, Alliance Bank Malaysia Bhd, Bank Islam Malaysia Bhd, CIMB Bank Bhd, Hong Leong Bank Bhd, Malayan Banking Bhd, Public Bank Bhd, RHB Bank Bhd, Maxis Bhd, Tenaga Nasional Bhd, and Telekom Malaysia Bhd.

Looking ahead, Lim said growth is also projected for new businesses which the group has been working on in the last several years and they include its new Smart Teller Cash Recycler, buySolar online marketplace and SmartCIT secured delivery solution, which have gradually started to contribute to the group's earnings and revenue.

Aims to attract institutional investors following transfer to Main Market

OpenSys hopes to attract institutional investors such as the Employees Provident Fund (EPF) and Permodalan Nasional Bhd to invest in the company following the transfer of its listing on Wednesday from the ACE Market to the Main Market of Bursa Malaysia Securities Bhd.

Lim said the transfer has given the group greater access to the broader capital market to fund future growth plans apart from attracting more institutional investors.

"[Previously,] we were in the ACE Market, so I wouldn't say it is a big percentage [of institutional investors]. We do have some insurance funds that have been invested in us.

"[Since] we are now on the Main Market, hopefully we would be on their (institutional investors) radar. Of course, what is better [is] to have people like the EPF and all these big institutional investors investing in the company.

"We have been paying dividends for the last 12 years. So I'm sure this will attract a certain community of institutional investors. In fact, we [have been] paying dividends every quarter for the last 17 quarters," he said.

As of 3.19pm, OpenSys' share price was 1.41% or half a sen lower at 35 sen, translating into a market capitalisation of RM156.4 million.

Read also:
OpenSys completes transfer to Main Market

The content is a snapshot from Publisher. Refer to the original content for accurate info. Contact us for any changes.






Related Stocks

ABMB 3.690
AEON 1.100
AEONCR 6.240
AFFIN 2.460
BIMB 2.500
BURSA 7.460
CIMB 6.680
HLBANK 19.420
MAXIS 3.400
MAYBANK 9.690
OPENSYS 0.395
PBBANK 4.240
RHBBANK 5.670
TENAGA 11.380
TM 6.070

Comments

Login to comment.