Bursa Malaysia (KLSE) Stock Investment Portal

KUALA LUMPUR (Feb 26): Kronologi Asia Bhd expects to see double-digit revenue growth in the financial year ending Dec 31, 2018 (FY18) as its Hong Kong-based subsidiary will start making a full-year contribution following the completion of its acquisition at the end of last year.

"All things remaining status quo, with Quantum Storage (Hong Kong) Ltd (QHK) we (should see) a double-digit revenue growth for FY18," its executive director Tan Jeck Min told a media briefing to announce the group's fourth-quarter and FY17 results today.

Kronologi, which provides on-site and off-site enterprise data management (EDM) and data storage solutions to Asian businesses, completed its RM45 million acquisition of QHK on Dec 4, 2017, which saw it contributing to one month of its FY17 financial performance.

Its acting chief executive officer, Philip Teo, said the integration of QHK will gather momentum in FY18, with both its India-based subsidiary Quantum Storage (India) Pte Ltd (QSI) and QHK to reap the benefits of economies of scale with the group's presence in 10 locations across eight countries in South Asia.

On its strategy to drive growth, Teo said the group will look at a three-pronged strategy in FY18 following its acquisition spree seen in FY16 and FY17.

"The growth strategy in FY18 will centre around three things. One, we [are] going to expand within the region. The acquisition of Quantum India and Quantum HK is the start of that. Right now, the focus is really on building on that — the integration of that.

"We will also develop the transnational backup for the EDM managed services. The transnational infrastructure gives our customers an option to pick another location outside of the country for backup," Teo said.

He added that the third pillar was to increase the emphasis of the EDM managed services, which provide a higher margin for the group.

"We set out a goal for ourselves, to double the growth of the EDM managed services earnings in the medium term (three years)," Teo said.

Earlier today, Kronologi announced its 4QFY17 results which saw its net profit rise by a third to RM3.44 million from RM2.59 million a year ago, attributable to better results in Southeast Asia and the completion of the acquisition of QHK.

According to Teo, QHK has fulfilled its profit guarantee for FY17 in the one-month contribution to the group.

The better profit results were in line with the growth of 56.7% in its quarterly revenue to RM42.7 million in 4QFY17 from RM27.3 million recorded in 4QFY16.

For the full FY17, Kronologi saw its net profit rise 68.5% to RM12.1 million from RM7.16 million in FY16, propelled by full-year contribution from QSI. Revenue for FY17 also surged 77.6% to RM144.4 million from RM81.3 in FY16.

As of Dec 31, 2017, Kronologi's cash and bank balances increased to RM35.1 million from RM8.3 million a year ago. On the back of a stronger financial result and stronger cash pile, the group said it remains focused on driving growth, highlighting a potential investment of about RM3 to RM5 million for infrastructure investment in the region, including in Malaysia.

The group's development on artificial intelligence solutions for its customers remains on track and is expected to be implemented sometime in 2018, said Teo, noting that market acceptance, however, is a key challenge as the solutions are not as broad as anticipated.

At 4.16pm, Kronologi shares were up 5 sen or 6.62% at 80.5 sen, with 12.63 million shares done, bringing a market capitalisation of RM249.27 million.