With the advancement of digital transformation and the explosive growth of data, there is a continuous increase in the demand for effective management, analysis, and utilization of data by enterprises. Concurrently, the rise of artificial intelligence has led to the automation, intelligence, and innovation of data management, enhancing the efficiency and accuracy of data processing for enterprises to better understand their data and make more accurate predictions and decisions.

Just a few days ago, Kronologi Asia Berhad (KRONO, 0176), a leading provider of enterprise data management solutions in Malaysia, released its fourth-quarter performance report, revealing a quarter-on-quarter growth in revenue. Without further ado, let's delve into the latest quarterly performance of KRONO.

Revenue Comparison (YoY -14.24%, QoQ +34.33%)

As of January 31, 2024, the company's revenue stood at approximately RM91.00 million, a decrease of about 14.24% compared to around RM106.12 million in the same period last year. Unfortunately, the management did not provide a specific explanation for this decline in revenue. However, it can be inferred from the quarterly report that the decrease in revenue is primarily attributed to the decline in income from Singapore and China.

Of the RM91.00 million revenue, approximately RM75.07 million came from the Enterprise Data Management Infrastructure Technology (EDM Infrastructure Technology) business, representing a year-on-year decrease of around 13.78%. The remaining approximately RM17.93 million came from the Enterprise Data Management Services (EDM As-A-Service) business, also declining by about 5.86% year-on-year.

Geographically, most of the revenue in this quarter came from Singapore, contributing approximately RM26.22 million. This was followed by the Philippines and China, contributing around RM24.95 million and RM20.75 million, respectively. It's noteworthy that the revenues from Singapore and China decreased by approximately 22.58% and 48.53% year-on-year, while the Philippines showed growth, increasing by approximately 68.92%.

However, compared to the previous quarter, the company's revenue increased by approximately RM23.26 million or 34.33%. This was mainly due to the significant increase in revenue from the EDM Infrastructure Technology business, which increased by approximately 50.21% quarter-on-quarter.

Overall, KRONO recorded a total revenue of approximately RM301.39 million for the fiscal year 2024, a decrease of about 4.08% compared to around RM314.28 million in the previous fiscal year 2023. Although the Philippines contributed higher revenue than China this quarter, most of the revenue for the fiscal year 2024 came from Singapore and China, accounting for approximately RM89.44 million and RM87.16 million, respectively (29.70% and 28.90% of total revenue), while the Philippines contributed 23.80% of the total revenue.

Net Profit Comparison (YoY -86.50%, QoQ +59.56%)

Due to the increase in depreciation of fixed assets, factories, and equipment, the company's net profit decreased by approximately 86.50% year-on-year, reaching around RM1.61 million. Additionally, factors such as solution center costs, foreign exchange losses, and lease interest expenses from leasehold assets contributed to an increase in overall operating costs, thereby reducing the company's profit.

Nonetheless, compared to the previous quarter, the company's net profit showed a growth trend, increasing by approximately RM0.60 million or 59.56%. This growth was mainly attributed to the increase in operating profit and gross profit margin.

In total, the company achieved a net profit of approximately RM8.21 million for the fiscal year 2024, a decrease of about 66.36% compared to the fiscal year 2023.

It is worth mentioning that KRONO is a net cash company, holding approximately RM83.32 million in cash and cash equivalents for this quarter.

Outlook

Facing the complex macroeconomic situation and unstable business environment in the Asia-Pacific region, KRONO remains committed to innovation and strategic progress. Despite the ongoing slowdown in the Chinese economy, the company successfully executed strategic initiatives formulated in the initial stages of FY2024, demonstrating resilience and adaptability in adversity.

Furthermore, the company's As-A-Service products continue to be an attractive choice for customers embarking on the journey of digital transformation. To this end, KRONO has adopted modern data methods, namely unified, unstructured, and end-to-end data platforms, enabling customers to extract maximum value from their data. This strategic measure is also aimed at customers with globally data-intensive operations, such as artificial intelligence, machine learning, and large-scale language model companies.

So, what are the opinions of readers regarding KRONO, which currently has a price-to-earnings ratio of approximately 38.39 times?

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Disclaimer: The above is purely for educational purposes and reflects personal opinions. It does not constitute any buying or selling recommendations.

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