In the ever-evolving landscape of financial management software, Autocount Dotcom Berhad (ADB, 0276) has emerged as a standout player, leveraging its core strengths to become a leader in the industry. ADB garnered significant attention from investors on its listing day, with shares briefly soaring to RM1.16, a remarkable 251.51% premium over the IPO issue price of approximately RM0.33 per share. With that context, let's delve into ADB's recent performance for the second quarter of the fiscal year 2023 (Q2 FY2023).

Revenue Comparison (YoY = N/A, QoQ -15.35%)

As ADB went public less than a year ago, there are no year-on-year comparisons available at this time. As of June 30th, ADB recorded revenue of approximately RM8.82 million. In comparison to the previous quarter (Q1 FY2023), revenue decreased by approximately RM1.60 million or 15.35%. This decline can primarily be attributed to reduced income from the distribution of financial management software during the current quarter.

Out of the RM8.82 million in revenue, approximately RM7.68 million came from the distribution of financial management software. As previously mentioned, this business segment experienced a decline in revenue, resulting in a quarter-on-quarter decrease of approximately 16.80%. The remaining RM0.88 million and RM0.25 million came from technical support and maintenance services and other business activities*, respectively.

*Other business activities include reselling computer hardware and third-party software license fees, as well as selling AutoCount accounting software course training materials to educational institutions.

In terms of geographical distribution, Malaysia stands out as the primary source of revenue for ADB, accounting for approximately 72.74% of total quarterly revenue. Singapore follows closely as the second-largest market, contributing around RM2.37 million in revenue, or approximately 26.89% of the total.

Net Profit Comparison (YoY = N/A, QoQ -35.79%)

During the second quarter of the 2023 fiscal year, ADB achieved a net profit of approximately RM2.35 million. Due to soft revenue from the distribution of financial management software, the company's net profit declined by approximately 35.79% quarter-on-quarter. However, it's worth noting that this quarter incurred IPO expenses of approximately RM0.83 million. Including the previous quarter, the total IPO expenses amounted to approximately RM1.13 million. According to the quarterly report, ADB’s total listing fees are approximately RM3.90 million, so the remaining RM2.77 million will "dilute" the company’s future profits.

It's worth mentioning that as of June this year, ADB has cleared its bank loans and is currently a debt-free net cash company. Additionally, the company also announced in this quarter that it will distribute a first interim dividend of RM0.0200 per share, with the ex-dividend date set for September 15th, and payment to shareholders scheduled for September 29th, 2023.

Outlook

Despite the recent decline in revenue, ADB remains confident in its future prospects. The company anticipates that digital transformation initiatives by governments in Malaysia, Singapore, Thailand, Indonesia, Vietnam, and the Philippines will drive growth in the financial management software industry.

Furthermore, in August of this year, the company announced its acquisition of a retail store in Oasis, Bandar Utama, for approximately RM1.36 million. This move is aimed at expanding office space and preparing for future industry growth. This expansion is expected to enhance the company's market share both domestically and internationally.

With an approximate PE valuation of 28.84 times, what are your thoughts on Autocount Dotcom Berhad, dear readers?