Company Background

The Company was incorporated in Malaysia under the Act on 25 February 2022 as a public limited company. The Company is an investment holding company. Through its subsidiaries, the Group is principally involved in the business of financial management software. At LPD, the structure of the Group is as follows:

The company is principally involved in the development and distribution of financial management software comprising accounting, POS, and payroll under the “AutoCount” brand. The range of AutoCount software is comprehensive as they are designed to support a wide range of fundamental finance and accounting functions of a business.

Use of proceeds

1. Regional expansion to capture growth opportunities - 56.19% (within 36 months)
2. Strengthening the R&D to expand the existing products’ features - 16.86% (within 24 months)
3. Working capital - 14.32% (within 24 months)
4. Estimated listing expenses - 12.63% (within 1 month)

Regional expansion to capture growth opportunities - 56.19% (within 36 months)

The company plans to expand regionally in the ASEAN region, they intend to expand their team in Singapore and set up offices in the capital cities of the Philippines, Indonesia, Thailand, and Vietnam. The company believes that having a physical presence in these countries will better facilitate the localisation and awareness of AutoCount software for them to penetrate the respective markets. This will enable the company to establish a regional sales and marketing team for each country to support the growth of the business across the ASEAN region.

The company intends to allocate approximately RM17.35 million, representing 56.19% of the gross proceeds from the Public Issue, for the regional expansion across the ASEAN region within 36 months from the date of Listing. Further details are set out in the table below:

In the event, the actual proceeds utilised for the expansion of the business in the Philippines, Indonesia, Thailand, Vietnam and Singapore are lower than the allocation of RM17.35 million, the excess will be used for working capital purposes. Any excess amount required for the expansion of the business in these countries will be allocated from internally generated funds.

Strengthening the R&D to expand the existing products’ features - 16.86% (within 24 months)

The Group recognizes the increasing demand for technology application and infrastructure solutions in all industries and the company wishes to strengthen its R&D and technology capabilities in order to maintain competitiveness as well as increase its market presence. In particular, the company intends to further enhance and replicate the existing technology application and infrastructure solutions across other industry verticals, as well as expand and develop new technology applications for enterprises.

The details of utilization of proceeds for the R&D activities set out above are as follows:

The group has commenced the hiring process of the additional programmers and they expect the team to be formed by the 4th quarter of 2023. The Group expects to utilise the proceeds for the payment of salaries of the additional programmers over a period of 24 months after Listing.

At LPD, the Group has 31 programmers. The additional programmers are required to expand its products’ features as mentioned above and to maintain the range of AutoCount software moving forward. This is to ensure that AutoCount software will continue to run smoothly moving forward.

Working capital - 14.32% (within 24 months)

The Group’s working capital requirements are expected to increase in line with the growth in business operations. To facilitate the expansion of the business and to support ASEAN regional expansion, the company intends to allocate approximately RM4.42 million, representing 14.32% of gross proceeds from the Public Issue, to fund the cash flow requirements to expand the manpower in the Malaysian office. The proposed allocations of the proceeds are set out below:

The company's existing employees are currently focused on its existing operations. The company anticipates that with the gradual geographic expansion of the operations and launching of new products (in local and overseas markets), these additional employees will be required to support larger operations.

Business model

The company is principally involved in the development and distribution of financial management software comprising accounting, POS, and payroll under the “AutoCount” brand. The range of AutoCount software is comprehensive as they are designed to support a wide range of fundamental finance and accounting functions of a business.

All AutoCount software is developed in-house and distributed as off-the-shelf software to end-user customers through its network of Authorised Dealers and directly through the internal sales and marketing team. This allows the company to focus the resources on continuous enhancement of the existing software and development of new software to cater to changing digitalisation needs of businesses and companies. The company also provides technical support and maintenance services to its Authorised Dealers as part of its service offerings to them, and to the direct end-user customers upon request.

Since the revamp of the accounting software using Microsoft .Net Framework and Microsoft SQL Server in 2006 and up to LPD, the company has sold approximately 70,000 AutoCount software licenses for use by approximately 210,000 businesses and companies, primarily in Malaysia and Singapore

The Group’s business model is as illustrated below:

The in-depth industry knowledge and programming expertise backed by the in-house

programmers, in-house sales and marketing team and AutoCount Academy represent the core of the business. These elements form the supporting system to the network of Authorised Dealers and end-user customers to provide high-quality software, sales support to the Authorised Dealers, and easy access to related learning tools to drive continuous sales, subscription, and usage of the AutoCount software.

The AutoCount software is distributed to Authorised Dealers for sale to businesses and companies in the form of software licenses. The network of Authorised Dealers comprises mostly software solution providers who are involved in the provision of software solutions using the AutoCount software as one or several of the modules of their software solutions. Please refer to Section 7.2.3 of this Prospectus for further details on the wide network of Authorised Dealers. There are also circumstances where the company sells its AutoCount software directly to businesses and companies upon request by these end-user customers. In the past 4 FYEs 2019 to 2022, the sales of financial management software to the Authorised Dealers accounted for 59.10%, 60.91%, 59.15%, and 66.04% of the Group’s total revenue respectively, and the direct sales of financial management software to businesses and companies accounted for 19.67%, 20.74%, 26.06% and 21.98% of the Group’s total respectively.

The target end-user customers are mainly SMEs. Over the years, the AutoCount software has been used by businesses and companies in 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. These businesses and companies comprise mainly SMEs but the company also has large organizations, including multinational companies and publicly listed companies as the end-user customers. The company has large organizations such as Artroniq Berhad, LGMS Berhad, and Unimech Group Berhad which use the software. In the past 4 FYEs 2019 to 2022, based on management estimation, multinational companies and publicly listed companies constituted less than 1.00% of the total customer base.

The company operates from the head office at Oasis Corporate Park in Petaling Jaya, Selangor and they have a sales office in Singapore.

Click here to continue the IPO - Autocount Dotcom Berhad (Part 2)

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