Financial Highlights

The key historical financial information of the Group for the Financial Years Under Review are as follows:

• The revenue increased from RM 18 mil (FYE 2019) to RM 38 mil (FYE 2022) which shows the company is expanding the market very quickly.
• The GP margin is consistently above 70% which also means that the company has strong bargaining power over its products/services price. This is almost perfect data for GP margin, meaning that for every RM 1 in revenue, the gross profit is over RM 0.7. (Generally, a GP margin of 20% is considered high/ good).
• PAT margin is 35.75% in FYE 2022. As the company product. This is because the company's product does not require continuous purchases of raw materials for production, which means that the company incurs more labor costs. As a result, the NP margin may decrease significantly from the GP margin.
• The gearing ratio is 0.23 times, which is under a healthy range and this also indicates that the company is better equipped to handle unexpected financial crises. (A good gearing ratio should be between 0.25 – 0.5).

Major customer and Supplier

Major Customers

The Group’s top 5 major customers for FYE 2022 are as follows:

According to the details, the top 5 customers are around 14.25%. The management has effectively diversified the customer base to avoid the risk of customer concentration, largely due to the nature of the company's product. As a software service provider, customers typically only need to purchase necessary software and services, which requires the company to constantly seek potential customers. As a result, the company does not rely on any single customer for its revenue.

Major Suppliers

The Group’s top 5 suppliers for FYE 2022 are as follows:

According to the details, the top 5 suppliers are around 60%. The top 1 supplier contributes 26.23% out of all purchase contributions. The main products and services that the company sourced from these major suppliers were implementation, upkeeping, and/or maintenance services as well as software development, upkeeping, and/or maintenance services focusing on localisation for the software which was outsourced to third parties; SQL runtime license on Microsoft SQL Server for the usage of its database management system for the software; cloud computing and hosting platform for the hosting of the cloud-native software, dongles that are used as one of the forms of delivery for the on-premise software and POS hardware when requested by the customers.

However, the management mentioned they are not dependent on these suppliers as such products and/or services that they purchased from these suppliers are readily available in the market.

Industry Overview

From 2019 to 2020, the sales value of accounting software licenses, POS software licenses, and payroll software licenses in Malaysia increased at a CAGR of 14.84%, 9.27%, and 13.80%, respectively. Despite the COVID-19 pandemic in 2020 and 2021, the financial management software industry in Malaysia, measured in terms of the sales value of accounting software licenses, POS software licenses, and payroll software licenses recorded a YOY growth of 16.03%, 11.59%, and 15.14% respectively in 2020, as well as 13.66%, 7.00%, and 12.46% respectively in 2021. A similar trend was observed in the sales value of accounting software licenses, POS software licenses, and payroll software licenses in Singapore, Thailand, Indonesia, Vietnam, and the Philippines from 2019 to 2021.

The financial management software industry is expected to continue on its growth trajectory, driven by the growth in the number of businesses, continuous businesses’ need for the automation of financial management processes, as well as the acceleration of digitalisation efforts for business sustainability along with the continuous technological advancement and changes in business environments in order for the business to become more fast-paced through automation which increases the efficiency in financial management. The financial management software industry is also expected to be driven by the implementation of initiatives for digital transformation by the governments in Malaysia, Singapore, Thailand, Indonesia, Vietnam, and the Philippines.

As such in 2022, SMITH ZANDER estimates the following growth in the respective financial management software industry in Malaysia, Singapore, Thailand, Indonesia, Vietnam, and the Philippines.

• The sales value of accounting software licenses to have increased YOU by 14.36% to RM 109.35 million in Malaysia, 15.36% to USD 30.71 million in Singapore, 18.12% to USD 35.39 million in Thailand, 18.47% to USD 40.41 million in Indonesia, 23.40% to USD 32.22 million in Vietnam and 17.47% to USD 15.67 million in the Philippines.
• The sales value of POS software licenses to have increased YOY by 10.11% to RM 78.29 million in Malaysia, 12.00% to USD 20.26 million in Singapore, 15.27% to USD 26.50 million in Thailand, 15.33% to USD 31.07 million in Indonesia, 19.35% to USD 23.81 million in Vietnam and 15.94% to USD 12.00 million in the Philippines.
• The sales value of payroll software licenses to have increased YOY by 13.56% to RM 96.63 million in Malaysia, 13.27% to USD 25.70 million in Singapore, 17.35% to USD 31.25 million in Thailand, 17.28% to USD 34.89 million in Indonesia, 23.83% to USD 29.05 million in Vietnam and 18.09% to USD 14.23 million in the Philippines.

In 2023, SMITH ZANDER forecast the following growth in the respective financial management software industry in Malaysia, Singapore, Thailand, Vietnam, and the Philippines;

• The sales value of accounting software licenses to increase YOY by 13.27% to RM 123.86 million in Malaysia, 14.33% of USD35.11 million in Singapore, 18.08% of USD 41.79 million in Thailand, 18.36% to USD 47.83 million in Indonesia, 22.69% to USD 39.53 million in Vietnam and 16.85% to USD 18.31 million in the Philippines.
• The sales value of POS software licenses to increase YOY by 9.08% to RM 85.40 million in Malaysia, 10.96% to USD 22.48 million in Singapore, 15.21% to USD 30.53 million in Thailand, 15.16% to USD 35.78 million in Indonesia, 18.44% to USD 28.20 million in Vietnam and 15.08% to USD 13.81 million in the Philippines.
• The sales value of software licenses to increase YOU by 12.67% to RM 108.87 million in Malaysia, 12.49% of USD28.91 million in Singapore, 17.25% to USD 36.64 million in Thailand, 17.14% to USD 40.87 million in Indonesia, 22.93% to USD 35.71 million in Vietnam and 17.01% to USD 16.65 million in the Philippines.

Source: SMITH ZANDER

Business strategies and prospects for AUTOCOUNT DOTCOM BERHAD

The Group intends to undertake the following business strategies:

1. The company intends to expand its business presence to Thailand, Indonesia, Vietnam, and the Philippines; as well as continue to expand its business in Singapore.
   1. Establishment of offices
   2. Hiring of personnel
   3. Sales and marketing activities
   4. Localisation of software
2. The company intends to intensify the R&D efforts to enhance its software offerings
   1. Enhancement of AutoCount Cloud Accounting and AutoCount Cloud Payroll
   2. Enhancement of AutoCount OneSales

MQ Trader View

Opportunities

1. The company AutoCount software is widely used in the market across multiple industries. These businesses and companies are spread across multiple industries, which include consumer products, F&B, trading, distribution, services, grocery retailing, construction, property development, hospitality, telecommunications, and logistics to support their finance and accounting functions.
2. The management has delivered impressive financial results. The GP margin of over 70% and the NP margin of over 30% show the profitability of the company. The gearing ratio is 0.23 which shows the risk control management of the company. The trade receivable turnover decreased from 39 days (FYE 2021) to 17 days (FYE 2022), this shows a positive sign for the company's liquidity.
3. The company offers a range of financial management software that can be integrated and customized to suit the different needs of businesses and companies. The company offers 3 types of financial management software, comprising accounting software, POS software, and payroll software under the “AutoCount” brand.

Risk

1. The company is dependent on its team of programmers. They are dependent on a team of programmers who are equipped with extensive technical IT knowledge, product knowledge as well as experience in various technology and software such as C#, Delphi, React, React Native, Razor Page, and other development toolkits and software detailed to continuously improve the AutoCount software, develop new software to expand its product offerings, develop software upgrades and provide technical support and maintenance services to the Authorized Dealers and end-user customers.

Click here to refer the IPO - Autocount Dotcom Berhad (Part 1)

Community Feedback

We encourage traders to try out and evaluate the MQ Trader system and provide us feedback on the features you like to see in the system. We have received many positive feedbacks so far, and we are currently compiling and reviewing them for possible inclusion into the next release of the system.

We would like to develop this system based on community feedback to cater for community needs. Thanks to all those who have provided valuable feedback to us. Keep those feedback coming in!

Disclaimer

This article does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties in the Internet. We may or may not hold position in the stock covered, or initiate new position in the stock within the next 7 days.

Join us now!

MQ Trader stock analysis system uses Artificial Intelligence (AI), various technical indicators and quantitative data to generate accurate trading signals without the interference of human's emotions and bias against any particular stock. It comprises trading strategies which are very popular among fund managers for analysing stocks.

MQ Trader stock analysis system is SPONSORED for MQ Trader members. To use this amazing tool, you can sign up via MQ Trader Sign Up!

Contact us

Please do not hesitate to contact us if you have any enquiry:

Facebook: https://www.facebook.com/mqtrader

Instagram:https://www.instagram.com/mqtrader

i3messanger: https://messenger.i3investor.com/m/chatmq

YouTube: https://www.youtube.com/channel/UCq-26SGjlQTVQfO7DoEihlg

Email: admin@mqtrader.com