Company Background

The Company was incorporated in Malaysia under the Act on 4 August 2022 as a private limited company under the name of Panda Eco System Sdn Bhd. On 2 March 2023, it is converted into a public limited company and adopted its present name.

The Company is principally an investment holding company. The Group structure is as follows:

Through the subsidiaries, the company is principally involved in the development, customisation, implementation and integration of the Retail Management Eco-system. In addition, the company involved in the trading of third-party software, trading of IT hardware as well as software customisation, implementation and integration of process control and automation solutions.

Use of proceeds

1. R&D of new solutions - 15.5% (within 36 months)
2. Business expansion - 25.9% (within 24 - 36 months)
   1. Regional expansion in ASEAN countries - 10.8% (within 36 months)
   2. Establishing additional service hubs and expanding workforce in existing service hubs in Malaysia - 15.1% (within 24 months)
3. Expansion of CTS department - 9.6% (within 24 months)
4. HQ expansion - 17.2% (within 36 months)
5. Working capital - 16.2% (within 24 months)
6. Estimated listing expenses - 15.6% (Within 1 month)

R&D of new solutions - 15.5% (within 36 months)

Development of cloud-based modules for the Retail Management Ecosystem

The development activities of the cloud-based modules will comprise:

1. the development of software features, design, web and app-based retail modules;
2. integration with other cloud-based modules and hardware; and
3. prototyping and testing of these features and modules.

E-invoice Financing

The Group plans to develop a new solution for the digitalization of the invoice financing process, which will be known as E-invoice Financing. Invoice financing is generally used by the customers’ suppliers to leverage unpaid sales invoices to obtain short-term financing from financial institutions and the invoice financing process is generally paper-based. With the introduction of the E-invoice Financing solution, suppliers can digitally create, organise, verify and share their invoices with other requisite supporting documents for financing such as purchase orders and goods receipt notes. These digitalised documents can then be accessed by the relevant financial institutions easily and instantly.

Business expansion - 25.9% (within 24 - 36 months)

1. Regional expansion in ASEAN countries

The Group plans to establish 2 new service hubs in ASEAN countries, where Indonesia and the Philippines will each have 1 new service hub, by 2025. This will enable the Group to better penetrate as well as localise its software in the respective markets with its physical presence in the targeted countries.

A total of RM1.9 million is estimated to be required for the setup of these 2 new service hubs, and this amount is expected to be funded entirely from the gross proceeds from the Public Issue, over 36 months from the date of the Listing. The breakdown of the costs are as follows:

2. Establishing additional service hubs and expanding the workforce in existing service hubs in Malaysia

With the expansions in Kuala Lumpur and Penang, the company will be able to respond to issues of the customers situated at the Central and Northern regions of Peninsular Malaysia (which includes the states of Perak, Kedah, Penang, Kuala Lumpur, Selangor and Negeri Sembilan) more efficiently. Additionally, the Group believes that its reach to potential customers in the new regions will be improved and eventually broaden its market share in Malaysia

The total costs required for the setup is estimated at RM2.6 million, as follows:

Expansion of CTS department - 9.6% (within 24 months)

The Group's core value in securing and retaining its customers is to deliver continuous software assistance to the customers. As such, the company intends to gradually increase the headcount by employing an additional 20 CTS engineers by the end of 2025 particularly for the CTS department to support its expansion in operations in line with future business growth. As at LPD, the company has recruited 4 CTS engineers. To this end, the company intends to use recruitment platforms such as JobStreet, MYFutureJobs and AJobThing to hire personnel as they have generally not faced difficulty in doing so in the past. The additional CTS engineers will be stationed at the HQ in Melaka.

HQ expansion - 17.2% (within 36 months)

The Group is identifying a suitable property for this purpose. The company intends to identify a suitable property to be acquired by the end of the 1st half of 2024. The approximate size and usage of each area in the intended new HQ are as follows:

Working capital - 16.2% (within 24 months)

The Group’s working capital requirements are expected to increase in tandem with the expected growth in scale of the business. They have allocated approximately RM2.8 million from its gross proceeds raised from Public Issue to supplement its working capital over 24 months from the date of the Listing. The general working capital details are set out in the table below

Business model

The Group’s business activities are segmented as follows:

1. Retail Management Eco-system development, customisation, implementation and integration; and
2. Other business comprising:
   1. trading of third-party software;
   2. trading of IT hardware; and
   3. software customisation, implementation and integration of process control and automation solutions

The business model is depicted as follows:

Click here to continue the IPO - Panda Eco System Berhad (Part 2)

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