The technology industry had always been investors’ favourite due to their nature of high growth, as well as having high barrier of entry. Hence, most, if not all of the technology companies listed on Bursa Malaysia do enjoy a premium over other sectors, despite growing at a similar rate.
Now imagine this – what would happen to the valuation of a company if they switched from petroleum trading and oil bunkering to a technology company?
Rerating would happen, and the valuation would at least DOUBLE as oil company are usually traded at mid-single digit PE ratio, where technology companies are usually traded at double digit valuation.
As for today, this particular company we are talking about is Fast Energy Holdings Bhd (KLSE: 0084).
Dated 20th March 2023, Fast Energy Holdings had announced that the company would make a significant expansion into the consumer electronics sector, via its’ newly established wholly owned subsidiary, Fast Technology Sdn Bhd (Fast Technology).
The expansion was structured in a way where Fast Technology will be appointed by Great Work Corporation Limited (Great Work) as the exclusive distributor of FreeYond products in East and West Malaysia.
ShenZhen FreeYond Technology Co. Ltd (SFT), a China-based company, is the innovative developer and manufacturer of FreeYond product – where FreeYond’s brand carries consumer electronic products such as smartphones, smart wearables, and artificial intelligence of things (AIoT) products.
Great Work in turn is the exclusive regional distributor for FreeYond products in Malaysia, Singapore, Thailand, and Indonesia.
For information, the FreeYond prices are almost incomparable by other competitors due to its’ ultra-affordable nature. Take for example one of the flagship products of FreeYond – FreeYond F9.
With capabilities such as 4G LTE ready, 6.6 inch in size, 2G+64 GB, finger-print ready, the product is only selling at USD69.90 on wholesale level. I cannot envisage any of the other big brands are able to compete competitively at this pricing.
In fact, this bode well with the recent economical slowdown, where people are shifting towards more affordable solutions – FreeYond came to Malaysia at just the perfect timing.
Also, FreeYond just completed another round of funding, raising additional fresh capital of RMB100 Million for their expansion.
Under the Exclusive Distribution Agreement (Agreement), Fast Technology was granted the right to distribute and sell a range of FreeYond products across East and West Malaysia for an initial period of five years, starting latest by 1st April 2023.
The range of products includes the flagship F9 and M5 smartphones, the Pods 1 Bluetooth headsets, as well as Smartwatch F1 and S1.
If this goes well, ultimately this would change the fundamentals of Fast Energy Holdings from a oil and gas company to a technology company, where as we had mentioned previously, rerating will happen and it will reflect in the company’s share price.
With a market capitalization of RM27.0 million, it is safe to say any positive reflection would result greatly in the share price, and risks are obviously low at the current price level of 13 cents.
Do mark my words, Fast Energy Holdings will be the next superstar in Bursa!