SHARES in ACE Market-listed TFP Solutions Bhd have been gaining traction among investors, with their price doubling within a month — from 12.5 sen on Dec 3, 2020, to a peak of 25 sen on Jan 4 this year — along with a significant rise in trading volume.

Group managing director Datuk Hussian @ Rizal A Rahman believes TFP Solutions is back on investors’ radar, following a series of business transformation initiatives, which saw the loss-making group shift its focus to financial technology (fintech) and digital services.

“Unlike most businesses involved in digital services, we are focusing on the unbanked population — people without bank accounts in the country. We see a huge untapped potential in this market, especially in view of the current Covid-19 situation that leads to restrictions on people’s movements,” he tells The Edge in an interview.

In 2019, TFP Solutions disposed of Tech3 Solutions Sdn Bhd — a loss-making converged infrastructure solutions business — and transformed itself into a fintech company that focuses on digital service solutions in enterprise resource planning, human resources management and campus management systems.

Later that year, TFP Solutions launched OneCall, its mobile fintech service, in collaboration with mobile virtual network operator (MVNO) Tune Talk Sdn Bhd. Riding Tune Talk’s data and voice services, OneCall offers e-remittance, e-wages, virtual ATM, game PIN, lifestyle tool and bill payment services, among others. In a nutshell, it functions as an e-wallet for the unbanked population.

“Our digital service solutions are timely and meet the needs of Malaysians — all the more so during this pandemic,” says Hussian.

TFP Solutions estimates that two million Malaysians do not have a bank account, and there is an outflow of some RM20 billion of remittance via non-banking channels every year. About nine million people are living in rural areas and about 40% of Malaysia’s 32 million population falls within the bottom 40% (B40) income group.

“Internal research conducted shows that there are about two million Bangladeshis, a million Indonesians and 800,000 Nepalese residing in Malaysia. Most of these groups are our target segments and, with the e-remittance feature as well as the recent surge in Covid-19 cases, we expect to see more subscriptions to our digital services,” says Hussian.

He sees tremendous potential for TFP Solutions in this market, fuelled by the government’s aspiration to regularise foreign workers in the country. “Our fintech services, which include e-remittances, make it more convenient for our members to transfer money to their home country. We can also provide e-wages services for foreign workers, in line with the government’s initiatives.”

Elaborating on its e-wages services, Hussian says TFP Solutions is in discussions with a few local companies that employ thousands of foreign workers, to launch new services soon. “As you may be aware, most foreign workers in our country are unbanked. There are more than 2.5 million registered foreign workers in the country. This would be a huge opportunity for us to create a sustainable earnings stream, as these services would be used frequently.”

Digital gold trading platform

On Jan 4, TFP Solutions announced that it was teaming up with LEAP Market-listed ACE Innovate Asia Bhd to launch a digital gold trading platform. “We are expanding to digitalise gold trading through our platform with ACE Innovate Asia, a reputable gold bullion importer in the country. We are branding our gold as OneGOLD, which is a shariah-compliant gold trading business,” says Hussian.

The main difference between OneGOLD and its competitors, he says, is that TFP Solutions integrates its gold trading platform with its e-wallet, which enables its members to easily invest in gold whenever they want.

“We are looking at a wider market group, as we accept investments as low as RM10 per transaction. As a mobile fintech company, it is vital that we integrate these services so that our members can easily use the e-wallet to make remittances back to their home country, eat at our partnered merchants as well as invest in commodities such as gold. Our services will be ready within two months and our members will be able to easily trade gold in real time,” he adds.

For the cumulative nine months ended Sept 30, 2020, TFP Solutions saw its net loss widen to RM2.76 million from RM2.61 million a year ago.

While Hussian concedes that the group has been loss-making for the last three financial years, he points out that this was before it ventured into the fintech and digital space. “To put things in perspective, most of the infrastructure for our services is already available and most regulatory approvals have been obtained. This means the group should see a turnaround once we have achieved a certain threshold of members, which would give us sustainable and recurring revenue and profit.”

So far, TFP Solutions has more than 18,000 members on its OneCENT digital community. The group is also working with a few cooperatives to digitalise their operations. “It would give us immediate access to a massive pool of members — about eight million under 14,000 cooperatives in the country. While it is too early to celebrate our achievements, we are optimistic that this new venture will help the company to turn around and be a major earnings contributor to the group,” says Hussian.

Open to M&A

Hussian says TFP Solutions is open to mergers and acquisitions if the targeted company can add value to the group’s existing businesses. “When the time is right, we will pursue M&A. For now, the key is really about gaining market share in our target markets.”

Hussian, 58, is a major shareholder of TFP Solutions, with an equity interest of 27.41% as at Sept 22, 2020. He was appointed to the board in 2013 and redesignated as managing director in 2018. He is also executive director and a major shareholder of MobilityOne Ltd, which is listed on the Alternative Investment Market of the London Stock Exchange. MobilityOne is an e-commerce infrastructure payment solutions and platform provider that works closely with most of the telecommunications companies and financial institutions in Malaysia.