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CENSOF GROWTH OPPORTUNITY WITH COMPULSORY E-INVOICE IMPLEMENTATION
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Malaysia is going to implement e-invoice in stages, with a compulsory implementation by year 2027 in all businesses.
The first stage will be targeted for businesses with turnover exceeding RM 100 million. Subsequently, in 2025 will be business with turnover exceeding RM 50 million. 2026 is for businesses with turnover exceeding RM 25 million, while 2027 will be for all business.
How is this going to benefit Censof in the long run?
Censof core business is to provide software solution for financial management system to both government and commercial SME businesses. To make it easy - their business is "Software as a Service".
According to the latest figure, there are approximately 1.22 million of SME in Malaysia, contributing to 38% of the GDP in Malaysia.
Emergence of a new big market pie with compulsory implementation of e-invoice feature in all businesses.
The type e-invoice that is going to be implemented in Malaysia is going to be real time, to ensure that the e-invoice meet the necessary standards and criteria.
With the real time requirement, the software provider will need to link to LHDN system. Hence the software will need a renewal fee every year for support and maintenance.
With the adoption of e-invoice, it will be estimated that each SME will be needing to pay around RM 3000 to RM 4000 (depends on software complexity and number of users).
In summary, the compulsory implementation of e-invoice will bring about a new big market of RM 3.66 billion worth of business in ecosystem of ERP/POS system. (1.22 million SME x RM 3000)
If Censof is about the capture 15% of the market, that will be worth RM 550 million a year in revenue.
I am invested into Censof for a long term as I can see the potential of the company revenue and profit and dividend growth in the next 3 to 4 years.
Will be looking and sharing Censof software application and potential in the following update.
IMPORTANT NOTICE
Please be informed that I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing my ideas and opinion on the market outlook. Any company mentioned should not be interpreted as a buy/sell/trade call. Please do your own research and buy/sell/trade at your own risk.
Telegram https://t.me/targetinvest88
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