Initial Public Offering (IPO)

IPO - Infoline Tec Group Berhad (Part 1)

MQTrader Jesse
Publish date: Thu, 23 Jun 2022, 04:58 PM

Company Background

The company was incorporated in Malaysia on 5 October 2021 under the Act as a private limited company under the name of Infoline Tec Group Sdn Bhd. On 29 October 2021, the Company was converted to a public limited company to facilitate the Listing.
The company is an investment holding company while the Subsidiaries are principally involved in providing IT infrastructure solutions, cybersecurity solutions, managed IT and other IT services, and trading of ancillary hardware and software.
The Group’s head office is located in Kota Damansara, Selangor, Malaysia, with operations in Malaysia and PRC.
A summary of the business model is as follows:
The Group structure upon Listing is set out below:
Use of proceeds
  1. Setting up of technology center and disaster recovery center - 35.73% (within 9 months)
  2. Enhancement of NOC - 18.16% (within 8 months)
  3. Setting up of a SOC - 19.85% (within 18 months)
  4. Business expansion - 9.37% (within 12 months)
  5. Estimated listing expenses - 16.89% (within 3 months)
Setting up of technology center and disaster recovery center - 35.73% (within 9 months)
The company proposes to utilize RM8.46 million representing 35.73% of the total proceeds raised from the IPO to set up a technology center and disaster recovery center. The technology center will be set up at its Kota Damansara head office, while the disaster recovery center will be set up at a co-location facility.
The present infrastructure at its Kota Damansara head office has limited hardware and the company often has to rent third-party hardware to enable demonstration for solutions involving software-defined infrastructure and virtual desktop. The technical department will also have to rebuild infrastructure for every solution, and the head office can only demonstrate 1 type of solution at one point in time. Some of the software utilized is software for demonstration purposes only, hence may not be able to demonstrate the full capability of the software. Thus, by acquiring its own software and physical hardware components instead of renting from a third party, the company will be able to:
  • demonstrate the proposed solutions to potential customers at any time and is not constrained by the availability of the rented hardware;
  • demonstrate the full capabilities of the software to the customers without limitation, due to the software being a demonstration version; and
  • demonstrate a wider range of solutions involving software-defined infrastructure and virtual desktop, and run multiple solution configurations concurrently
The company intends to spend RM7.20 million to set up the technology center by acquiring the following hardware and software, and undertaking facilities enhancement:
In addition, the company currently uses third-party cloud-based disaster recovery facilities to minimize any disruptions to its operations. There are some limitations to the utilization of cloud-based disaster recovery facilities, including higher costs incurred as the volume of data stored grows as it is charged based on usage, as well as costs incurred for downloading the data stored on the cloud. In addition, there may be customers who prefer that we do not store and back up their company information using the cloud.  
Hence, the company intends to set up its own disaster recovery center which will enable them to recover and restore its data and IT infrastructure to allow for operations to continue despite disruptions caused by events such as cyber-attacks and natural disasters.
The disaster recovery center will be located at a different location (a highly secured physical environment) i.e. a co-location facility that they intend to rent. The company will acquire the necessary equipment and software to set up its r own disaster recovery center in the said location.
The company plan to spend RM1.26 million to set up its own disaster recovery center in the manner set out below:
In the event of a surplus/deficit in the allocated amount for enhancement of the technology center and set up of the disaster recovery centre, such variance will be adjusted to/from the proceeds allocated for business expansion.
Enhancement of NOC - 18.16% (within 8 months)
The company intends to utilize RM4.30 million representing 18.16% of the IPO proceeds to improve the infrastructure of the existing NOC by acquiring equipment, software, and accessories that allow for higher capacities, such as upgrading the switches, servers, and storage.
Currently, the NOC has limited bandwidth, and the current NOC’s dashboard analytics do not allow for the centralization of information from all systems/applications under the NOC such as the helpdesk applications and network monitoring system. As the systems in the current NOC run separately, analytics gathered through the systems/applications must be manually consolidated into a holistic report for customers.
The enhancement of the new NOC will entail increasing bandwidth and acquiring new hardware to cater to higher bandwidth, and upgrading systems. This will enable them to cater to more customers and enhance the range of managed network services provided as the new NOC will allow for the following, amongst others:
  • centralization of systems/applications in the NOC;
  • higher visibility on the status of the customers’ networks allowing for more comprehensive network insights which will ease troubleshooting of issues;
  • multi-tenancy where the NOC will be able to support multiple customers’ accounts concurrently, and dashboards can be customized for customers in accordance with the required scope of work; and
  • support and consolidate multiple platforms from different clients.
In order to upgrade the NOC, the company proposes to purchase the following new hardware and software and undertake facilities enhancement to ensure the present facilities can accommodate the additional hardware:
In the event of a surplus/deficit in the allocated amount for enhancement of the NOC, such variance will be adjusted to/from the proceeds allocated for business expansion.
Setting up of a SOC - 19.85% (within 18 months)
The company will be setting up the SOC in its Kota Damansara head office. The SOC will encompass a dedicated IT infrastructure to facilitate the monitoring and management of cyber threats and attacks impacting an enterprise’s IT infrastructure. The intended setting up of a SOC will enable a substantial upgrade (in respect of service offerings and capabilities) to the current managed cybersecurity services.
They intend to allocate RM4.70 million representing 19.85% of the IPO proceeds to set up the SOC, which will be used to acquire and set up the IT infrastructure required as follows:
In the event of a surplus/deficit in the allocated amount for setting up the SOC, such variance will be adjusted to/from the proceeds allocated for business expansion.
Business expansion - 9.37% (within 12 months)
The company plan to use approximately RM2.22 million representing 9.37% of the IPO proceeds to expand the sales and technical team by recruiting additional personnel to support the growth of the existing business operations due to the expected growth in the scale of business in tandem with the expansion into the Southern region of Peninsular Malaysia (i.e. Johor and Malacca), East Malaysia (i.e. Sabah and Sarawak), and several major cities in PRC.
The company intends to recruit an additional 6 personnel to be stationed in Johor, Sabah, and Sarawak, and 6 personnel to be stationed in several major cities in PRC. Details of the allocations are as follows:
Increasing the number of technical personnel will allow the company to promptly respond to their potential customers and existing customers, thus enabling them to provide reliable and efficient service to its customers. They do not intend to set up offices in these identified locations as the newly hired technical personnel will have the flexibility of working from home and at the customers’ premises.
In the event of a deficit in the allocated proceeds for business expansion, the Group has sufficient internally generated funds to fund such variances. As such, the Group does not foresee any impact on the business expansion plans.

Business model


The company is an IT infrastructure and cybersecurity solution provider. The core expertise lies in:
  1. designing suitable IT infrastructure and cybersecurity solutions that meet customers’ business needs, requirements, and budget;
  2. project delivery and implementation which includes the implementation and configuration of the physical hardware components and software based on the agreed-upon design; and
  3. management and maintenance of the abovementioned solutions.
As for physical hardware components and software, the company sources them from Principals through their distributors.
The Group’s principal activities and solutions are categorized and summarized in the diagram below:
Provision of IT infrastructure solutions
The company specializes in the design and implementation of IT infrastructure solutions, the process of which is described as follows:
  • The company assesses and evaluates its customers’ business environment to consult and recommend a suitable IT infrastructure design that meets their business needs, requirements, and budget (encompassing network connectivity, data storage, and efficient processing of applications that facilitate and automate enterprises’ business or operational processes);
  • The company set up the physical hardware components of this design and configures the appropriate software with these physical hardware components at either the Group’s office or the customers’ premises, depending on the customers’ request;
  • The abovementioned configured physical hardware components and software are installed on-site at the customers’ premises to form the IT infrastructure;
  • Once the IT infrastructure is formed and handed over to the customers, the company continues to provide maintenance services if requested by its customers.
The company can implement 2 or more of the abovementioned solutions for the customers, depending on the customers’ needs and requirements. If required, they are also able to design and implement a complete data center, comprising data center solutions, system infrastructure and network infrastructure, and/or software-defined infrastructure.
Cybersecurity solutions
Cybersecurity solutions refer to a combination of hardware and software to prevent cyber threats and attacks, and services to install and implement these solutions. The company provides cybersecurity solutions to protect its customers’ IT infrastructure and data from cyber threats, attacks, and unauthorized access which mitigate cybersecurity risks and minimizes costs associated with dealing with cyber threats and attacks.
The company specializes in the design and implementation of cybersecurity solutions. They assess and evaluate their customers’ IT infrastructure and industry requirements in order to recommend suitable cybersecurity solutions. The cybersecurity solutions are customized to suit the customer's business needs, industry requirements, and budget. An appropriate cybersecurity solution will then be configured with its customers’ IT infrastructure.
Managed IT service and other IT services
Building upon the technical knowledge and industry experience, the company offers managed IT services
The services allow enterprises to monitor and manage their IT infrastructure and cybersecurity solutions without incurring substantial operational expenses in setting up their own dedicated IT team. The managed IT services allow customers to reduce their operational expenses on IT overhead costs (in respect of hiring, retaining, and equipping an internal IT network management team). The customers can leverage its experience and professional services for their IT infrastructure, which allows them to concentrate on their core business processes while saving costs and resources.
The company charges a contract fee on a monthly basis over a specified period for these managed IT services
Some of the benefits that the customers can derive from the managed IT services include:
  • Productivity improvement – As management of IT infrastructure and cybersecurity is outsourced to the company, therefore their customers can focus on operating their core business activities;
  • Access to expertise and advanced technology – As the company is a specialist in IT infrastructure and cybersecurity, therefore their customers can leverage its expertise in developing best practices, procedures, and policies;
  • Lower operational expenses – Rather than spending on setting up an internal IT team, the customers can pay a contract fee according to the different types of services required; and
  • Flexibility and scalability – The customers need not recruit, train and manage new IT personnel to manage newly acquired equipment to cater for expansions in IT infrastructure. Conversely, the customers can also easily lower their IT overhead costs in the event they were to scale down on their IT infrastructure.
The typical tenure of the maintenance and support contracts is between 1 and 3 years. The contract fee is typically paid at the beginning of the contract or on a periodic basis.
Trading of ancillary hardware and software
When required, the company also provides ancillary hardware and software products to its customers, which is complementary to its Group’s business. These hardware products include computers, notebooks, printers, accessories, and peripherals. If required, we also provide software such as operating systems and computing applications.
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