Now, you might hear some rumours on this company, saying that it is a con-man company, a scam company or whatsoever. But what you do not know is, the company profitability is growing despite all these haters. But let's look at the facts, or, the numbers.

Dear Investors,



I've noticed the recent EMS sector and Semiconductor rally had left this company a laggard, a hidden gem behind the spike in the technology sector.



So when we talk about technology, in Malaysia generally we are focused on the "hardware" perspective, which our capabilities are mainly based on the manufacturing scale, as well as providing precision material to over sea clients or those who stationed in Penang. That being said, there are a few companies that excels in their own territory, MI (5286) is an excellent example of their technology on WLCSP.



So, which company we are going to discuss?

That company would be - ARB Berhad (7181) !

https://www.nst.com.my/business/2020/10/631890/ageson-targets-ship-50000-tonnes-river-sand-month-china-hong-kong-december

Let's say if this toilet roll were to sell at RM 10 per roll, assuming if the price dropped to RM 5 without change in its quality, would you buy more to stock (especially during the COVID-19 pandemic? UK is stocking up toilet rolls again) or would you prefer to buy in RM 10? I believe at this kind of time, "value investors" like housewives knows the best.



So, in simpler terms - would you buy something of a certain value (say RM 10) for a cheaper price of RM 5, or at a premium of RM 15? I believe the answer is obvious..



But when it comes to share investments, why are people buy shares when they are expensive, sell when its cheap? What is this madness behind the thought of doing so?? Well, I'm sure that's not the right way of investment. Buying when a share is cheap and selling it when its priced at premium is the simplest and easiest way to profit. For example, I bought AEONCR when its around RM 9 or so, so whats the price now? You know it..



The key value I would like to share here is, buy low and sell high essential means buy "lower" than its value, and sell "higher" than its value. As for ARBB, I've shared numurous times that the company is at least worth RM 0.500 or above.. So are you buying toilet roll at discount, or you want to chase it at premium? Its completely up to you! :)



Cheers and I wish your investment journey bodes well for you.

Ever heard of the toilet roll investment theory?

Dear Fellow Investors,



Once again, we will discuss on the topic on share price again. And of course, this time its one of my favourite company - ARB BERHAD (7181). So some investors actually contacted me amidst the panic of why the stock price is dropping from RM 0.300 ish to RM 0.260. So here's my answer:

这是Frost＆Sullivan文分析的另一个摘录。

ARB的方法针对分销和服务行业中的中小企业（通常在10-15年内具有长期增长记录），这些行业处于数字化转型初期以组建合资企业（JV）。这些中小型企业通常不具备实施昂贵的ERP解决方案的资金或风险偏好，而且还面临运营和管理效率低下的问题，从而限制了其增长。

合资企业接管中小型企业的业务运营-中小型企业专注于销售和库存管理以及ARB（具有控股权）融资，并运行定制的ERP解决方案，并定期提供必要的更新和新模块，从而释放现金流用于与中小企业建立互惠互利的关系。除中小企业之外，ARB在与政府联系公司（GLC）进行的项目中也使用了类似的合资模式。

ARB通过提供旨在对销售和利润产生直接影响的解决方案（基于其技术/业务知识）为其合资伙伴创造价值。 ARB还允许其合作伙伴网络向最终客户交叉销售其产品和/或追加销售包装，从而改善其合资伙伴网络的业务成果。

这种创新的业务模型解决了ERP市场中客户和供应商的三个主要痛点

客户，尤其是中小型企业，不愿意在成本高昂的ERP实施上花费（通过从现金/债务驱动的技术投资模式转变为基于权益的技术投资模式）。

ERP系统变得过时或不适应客户不断变化的业务需求（通过确保技术提供商和客户的动机通过利益共享模型保持一致）–激励技术供应商更好地了解客户需求并提供定期升级和调整）

基于结果的模型的失败，因为供应商对性能的影响非常有限（通过给予技术提供商直接的管理监督以确保其ERP解决方案与最佳业务和工作流程一起实施）


本文的目的不是要您购买ARBB股票。我的最终目的是要增加公共投资商在ERP和IoT领域的知识（将很快分享IoT的分析），以便您发现ARBB的真正价值。

以下是Frost＆Sullivan分析的摘录，我认为对于新投资者来说，了解ERP和IoT领域的更多知识将是一本好书。当然还有-ARB BERHAD（7181）

ARB的主要优势包括其设计和开发能力，使它能够从头开始创建ERP解决方案-使其能够设计高度定制的系统，以满足从零售到农业等不同行业的不同需求。通过这种方式，ARB能够满足其目标客户的特定需求，这些目标客户通常对系统仪表板，客户支持以及应用程序和模块有非常独特的要求。

凭借从其合资企业获得的经验，ARB对现场部署的用户（业务经理等）的要求有了更好的了解。因此，它能够调整其ERP产品组合，使其高度适应中小企业通常面临的挑战，其中包括：

改善管理整合；

监督各种业务活动的成本和收益；

从事以数据为依据的战略规划；

实行严格的财务控制措施；

ARB的ERP解决方案还可以根据其客户（尤其是中小型企业）的需求进行高度扩展，尤其是在以下领域：

整合机器学习，人工智能和数据分析工具以自动化操作，商业智能和营销目的；

实现集中于仓库和库存可见性的集成供应链管理；

容纳多层次的会员/推荐计划；

在零售系统中集成电子钱包解决方案；

优化后端操作以提高操作效率；和

具有处理广泛行业所需的多功能性。


那么，其他公司可以采用ARBB的做法吗？最简洁的答案是不。 ARBB独特的业务模型使ERP领域的大多数竞争者（即使不是全部）都瘫痪了。

T7 Global: Wins RM16.9m construction contract for Endau Mersing Fish Processing Park. T7 Global’s wholly-owned subsidiary Tanjung Offshore Services SB has secured a RM16.93m contract from East Coast Economic Region Development Council (ECERDC) for the proposed construction and completion of Endau-Mersing Fish Processing Park in Endau, Johor. The duration of the contract is 78 weeks, commencing from Sept 9, 2020. The date of completion for the works is on March 8, 2022. (SunBiz)

For example, it embarked on its foray into the renewable energy segment through its acquisition of C&M Renewable Energy Technology Sdn Bhd in Malaysia allowing it to leverage its capabilities in IoT related system integration and solution engineering in large-scale renewable projects in Malaysia. This acquisition not only supports ARB’s vision of supporting environmental sustainability-related activities, it also allows ARB to be in a strong position to compete in the rapidly growing green energy industry in Malaysia, which is seeking to increase the share of renewable energy sources in the country’s energy mix from 2% in 2018 to 20% in 2025.

ARB has demonstrated the ability to expand into sectors adjacent to its current focus areas by harnessing its IoT capabilities and leveraging targeted partnerships and acquisitions – indicating the potential for future expansion and growth.

To be very honest, I cannot find another proxy in Malaysia market for ERP and IoT sector apart from ARBB. I'm not sure why the share price of ARBB is dropping despite good profit growth and ultra bright prospects! However, it is my chance to accumulate ARBB shares and I currently hold quite substantial amount of the company's shares.

Along with its primary focus on areas like smart home and water supply management, ARB continues to expand the scope of its business via strategic partnerships and acquisitions.

Synergies between IoT and ERP portfolios:

ARB’s expertise in the ERP space together with its firsthand understanding of the demands that business users place on ERP systems has granted it experience regarding the suitability of dashboards, data analytics tools and data management processes. ARB carries this experience regarding effective customization over into the IoT space ensuring that the functionalities of its IoT solutions (UI, data analytics tools etc.) are in line with the business requirements of its clients.
This focus on enhancing business outcomes distinguishes ARB from more traditional system integrators. Even established ERP vendors are in the beginning stages of augmenting their ERP offerings with IoT capabilities in this region – indicating that ARB can exploit first mover advantage with a hybrid IoT-ERP positioning.
Proven track record of expanding into adjacent verticals as in the case of Re-Energy:

Ability to integrate solutions from a variety of vendors:

In the Smart Home space, ARB has the capability to develop centralized control and monitoring solutions that can integrate a wide range of smart home devices and allow users to access these solutions via smartphone or desktop applications.
In contrast, many of their competitors have exclusive arrangements with specific smart home hardware brands limiting their flexibility to design solutions according to property developers’ needs and budgets.
Capabilities in large scale engagements:

The scale of IoT deployments can be defined as follows:

Small scale: Less than 500 connected devices
Medium scale: 500 – 10,000 connected devices
Large scale: More than 10,000 connected devices

ARB has demonstrated its ability to implement large scale IoT deployments, differentiating itself from its competitors who primarily occupy the small and medium scale space, leading it to be perceived as a top-tier IoT system integrator. This allows ARB to compete more effectively against larger players in future large scale implementation projects and secure collaborations with industry-leading players.

For example, it signed an MoA with Hangzhou Mayam IoT Tech Co Ltd to potentially deploy 300,000 smart water meters (Phase one of the rollout) in a project worth RM 200 million, with ARB handling the installation, commissioning and testing of the water meters.
It also inked an MoA with Shuifa IoT Tech Co Ltd to supply 300,000 Malaysian households with smart water filtration systems in a project worth RM 600 million.

We had discussed the prospects of ERP sector for the company ARB Berhad (7181) yesterday. And if you have not seen it yet, feel free to click on the link below to check it out.
Link: https://klse.i3investor.com/blogs/gmarb/2020-09-01-story-h1512630177-An_article_excerpt_from_Frost_Sullivan_analysis_read_it_before_this_sto.jsp

Now let's get back to our main topic - IoT prospects for ARBB.

Here's another excerpt from the Frost & Sullivan analysis.

ARB approaches target SMEs (typically with a long track record of growth over 10-15 years) in the distribution and service industries who are in the early stages of their digital transformation journey to form joint ventures (JVs). These SMEs typically do not possess the funds or risk appetite to implement costly ERP solutions and are also facing operational and management inefficiencies that place a ceiling on their growth.

The JV takes over the business operations of the SME – with the SME focusing on sales and inventory management and ARB (with the controlling interest) financing and operating a customized ERP solution and periodically providing the necessary updates and new modules, freeing up cash flow for the SME in a mutually beneficial relationship. Beyond SMEs, ARB also uses similar JV models in projects with government linked companies (GLCs).
ARB creates value for its JV partner by providing a solution (based on its technical/business know-how) designed to generate an immediate impact on sales and profits. ARB also improves business outcomes for its network of JV partners by allowing its network of partners to cross-sell their products and/or upsell packages to end customers.
This innovative business model addresses three major pain points for customers and vendors in the ERP market
Customers, particularly SMEs, being unwilling to spend on costly ERP implementation (by essentially shifting from a cash/debt driven model of technology investment to an equity-based model of technology investment.)
ERP systems becoming obsolete or unfit for customers’ changing business needs (by ensuring that the motives of the technology provider and the client are aligned via a profit-sharing model – incentivizing the technology vendor to develop a better understanding of customer requirements and provide periodic upgrades and adjustments)
Failure of outcome-based models as vendors have very limited levers to influence performance (by giving the technology provider direct managerial oversight to ensure that its ERP solution is being implemented alongside optimal business and workflow processes)

So, can other companies adopt what ARBB is doing? The short answer is no. ARBB's unique business model disable most, if not all close competitors in the ERP sector.

Improving management integration;

- Gaining oversight on the costs and benefits from various business activities;

- Engaging in data-driven strategic planning;

Instituting strict financial control measures;

-ARB’s ERP solutions are also highly scalable according to the needs of its customers (particularly SMEs) especially in the following areas;

-Incorporating machine learning, AI and data analytics tools to automate operations, business intelligence and marketing purposes;

-Achieving integrated supply chain management with a focus on visibility over warehouses and inventory;

-Accommodating multi-level membership/referral programmes;

-Integrating e-wallet solutions in retail systems;

-Optimizing backend operations to improve operational efficiencies; and

-Possessing the versatility required to handle operations across a wide range of industries.

With the experience gained from its JVs, ARB has a better appreciation of the requirements that users (business manager etc.) deployed on the ground have. It has therefore been able to tailor its ERP portfolio to be highly aligned to the challenges that SMEs typically face which include:

ARB’s key strengths include its design and development capabilities that allow it to create ERP solutions from the ground up – allowing it to craft highly customized systems that can cater to the varied needs of different industries, from retail to agriculture. In this way, ARB is able to cater to the specific needs of its target customer, who typically have very unique requirements with respect to system dashboards, customer support and applications & modules.

Below are the excerpts from Frost & Sullivan analysis, I thought that it would be quite a good read for new investors to understand more about ERP and IoT sector. And of course - ARB BERHAD (7181)

hospital bed maker LKL said its subsidiary has secured a contract to supply nitrile gloves to a China-based company.

LKL's announcement, however, did not reveal from where or how it would be sourcing the nitrile gloves, considering that LKL does not own any glove production facilities. Furthermore, it is not currently supplying any nitrile gloves.

Nevertheless, LKL is expecting the new venture to give an instant boost to its earnings for the current financial year ending April 30, 2021 (FY21).

Given the meteoric rise on these companies’ share prices, some quarters raise their eyebrows on the premium valuation that these penny stocks are trading at now. To justify the high valuation, these companies would have to achieve a quantum leap in their earnings.

从采矿与采石业起家的双威（SUNWAY,5211,主板工业产品服务组），如今已发展为大马其中一家业务多元化的财团，组合投资与业务存在协同作用，自2011年成功合并双威城与双威控股后，集团盈利处于上升轨道，通过策略性决策，继续严谨落实营运计划。

在已结束财政年，集团营业额从前期的54亿1016万令吉，减至47亿8027万令吉，虽然减少11.6%，不过归股东盈利增加18.9%。集团36%税后盈利来自产业发展与建筑组，其他组别，包括产业投资与产业信托、休闲业务、医药保健、贸易与制造业、采石业、建筑材料与投资控股，占64%。

以地区分布来说，双威税后盈利主要来自大马，接下来是中国，为集团第二大盈利贡献市场。基于集团盈利表现不俗，董事部宣布分发每股9.07仙股息，比2018年的7.12仙高。

2019财政年，集团在3个国家增购35英亩的土地，第一在新加坡的6.16英亩9年租赁地皮；在大马的土地收购集中在巴生河流域，2019年7至10月份别收购3块土地，即：位于哥打白沙罗的9.45英亩租赁地、位于珍珠武吉加里尔的11.77英亩永久契约地、位于旺沙玛朱的3.69英亩永久契约地。

双威已在中国天津完成双威花园第一和第二期计划，集团2019年9月13日以2亿5780万令吉，收购一块6.86英亩土地，土地总面积增至3347英亩，为期15年的计划，估计发展总值高达586亿令吉。

至于产业投资组，集团把双威大学与双威学院的土地和大厦脱售给旗下产业投资信托，并将投资收入转向其他领域。

此外，集团非产业相关业务，2019财政年继续成长，其中医药保健领域的“双威伟乐医药中心”，2019年9月开始营运，在12层的医院大楼，提供多边医药服务，这是集团医药保健扩充计划的重大里程碑，为集团综合产业发展计划的第三间医院。

采石组新成长支柱

与此同时，集团建筑组已成功移交布城计划的设计与建筑，这项计划是政府其中一项最大的办公大厦。除此之外，双威的采石组已逐渐成为集团新的成长支柱，包括以7010万令吉收购Blacktop工业公司的100%股权、以1亿2500万令吉收购Dolomite Granite Quarry公司，不过交易尚待完成。

放眼未来，集团将继续融入科技，为转型21世纪“永续智能城”的模式努力，集团也在怡保双威城、依斯干达双威城，复制同样的模式，期待在大马各地以智能科技，建立永续特色城镇与社区。

Tenants who have signed up or are going to sign up under Malaysia Airports Holdings Bhd’s (MAHB) ongoing airport commercial reset programme will get to benefit from a rental reduction of up to 30.0% from the current rate. This is equivalent to a total annual savings of RM45.0m for the participating tenants. (The Edge)

Proven track record of expanding into adjacent verticals as in the case of Re-Energy:
• Along with its primary focus on areas like smart home and water supply management, ARB continues to expand the scope of its business via strategic partnerships and acquisitions.
• For example, it embarked on its foray into the renewable energy segment through its acquisition of C&M Renewable Energy Technology Sdn Bhd in Malaysia allowing it to leverage its capabilities in IoT related system integration and solution engineering in large-scale renewable projects in Malaysia. This acquisition not only supports ARB’s vision of supporting environmental sustainability-related activities, it also allows ARB to be in a strong position to compete in the rapidly growing green energy industry in Malaysia, which is seeking to increase the share of renewable energy sources in the country’s energy mix from 2% in 2018 to 20% in 2025.
• ARB has demonstrated the ability to expand into sectors adjacent to its current focus areas by harnessing its IoT capabilities and leveraging targeted partnerships and acquisitions – indicating the potential for future expansion and growth.

To be very honest, I cannot find another proxy in Malaysia market for ERP and IoT sector apart from ARBB. I'm not sure why the share price of ARBB is dropping despite good profit growth and ultra bright prospects! However, it is my chance to accumulate ARBB shares and I currently hold quite substantial amount of the company's shares.



This article's purpose is not to ask you to buy ARBB shares. What my ultimate purpose is to increase the knowledge of public investors in the ERP and IoT sector (Will be sharing IoT's analysis soon), so that you would discover the true value of ARBB.

Synergies between IoT and ERP portfolios:
• ARB’s expertise in the ERP space together with its firsthand understanding of the demands that business users place on ERP systems has granted it experience regarding the suitability of dashboards, data analytics tools and data management processes. ARB carries this experience regarding effective customization over into the IoT space ensuring that the functionalities of its IoT solutions (UI, data analytics tools etc.) are in line with the business requirements of its clients.
• This focus on enhancing business outcomes distinguishes ARB from more traditional system integrators. Even established ERP vendors are in the beginning stages of augmenting their ERP offerings with IoT capabilities in this region – indicating that ARB can exploit first mover advantage with a hybrid IoT-ERP positioning.

Capabilities in large scale engagements:

The scale of IoT deployments can be defined as follows:
• Small scale: Less than 500 connected devices
• Medium scale: 500 – 10,000 connected devices
• Large scale: More than 10,000 connected devices
• ARB has demonstrated its ability to implement large scale IoT deployments, differentiating itself from its competitors who primarily occupy the small and medium scale space, leading it to be perceived as a top-tier IoT system integrator. This allows ARB to compete more effectively against larger players in future large scale implementation projects and secure collaborations with industry-leading players.
• For example, it signed an MoA with Hangzhou Mayam IoT Tech Co Ltd to potentially deploy 300,000 smart water meters (Phase one of the rollout) in a project worth RM 200 million, with ARB handling the installation, commissioning and testing of the water meters.
• It also inked an MoA with Shuifa IoT Tech Co Ltd to supply 300,000 Malaysian households with smart water filtration systems in a project worth RM 600 million

Ability to integrate solutions from a variety of vendors:
• In the Smart Home space, ARB has the capability to develop centralized control and monitoring solutions that can integrate a wide range of smart home devices and allow users to access these solutions via smartphone or desktop applications.
• In contrast, many of their competitors have exclusive arrangements with specific smart home hardware brands limiting their flexibility to design solutions according to property developers’ needs and budgets.

We had discussed the prospects of ERP sector for the company ARB Berhad (7181) yesterday. And if you have not seen it yet, feel free to click on the link below to check it out.

Link: https://klse.i3investor.com/blogs/gmarb/2020-09-01-story-h1512630177-An_article_excerpt_from_Frost_Sullivan_analysis_read_it_before_this_sto.jsp

Now let's get back to our main topic - IoT prospects for ARBB.

• The JV takes over the business operations of the SME – with the SME focusing on sales and inventory management and ARB (with the controlling interest) financing and operating a customized ERP solution and periodically providing the necessary updates and new modules, freeing up cash flow for the SME in a mutually beneficial relationship. Beyond SMEs, ARB also uses similar JV models in projects with government linked companies (GLCs).
• ARB creates value for its JV partner by providing a solution (based on its technical/business know-how) designed to generate an immediate impact on sales and profits. ARB also improves business outcomes for its network of JV partners by allowing its network of partners to cross-sell their products and/or upsell packages to end customers.
• This innovative business model addresses three major pain points for customers and vendors in the ERP market
• Customers, particularly SMEs, being unwilling to spend on costly ERP implementation (by essentially shifting from a cash/debt driven model of technology investment to an equity-based model of technology investment.)
• ERP systems becoming obsolete or unfit for customers’ changing business needs (by ensuring that the motives of the technology provider and the client are aligned via a profit-sharing model – incentivizing the technology vendor to develop a better understanding of customer requirements and provide periodic upgrades and adjustments)
• Failure of outcome-based models as vendors have very limited levers to influence performance (by giving the technology provider direct managerial oversight to ensure that its ERP solution is being implemented alongside optimal business and workflow processes)



This article's purpose is not to ask you to buy ARBB shares. What my ultimate purpose is to increase the knowledge of public investors in the ERP and IoT sector (Will be sharing IoT's analysis soon), so that you would discover the true value of ARBB

So, can other companies adopt what ARBB is doing? The short answer is no. ARBB's unique business model disable most, if not all close competitors in the ERP sector.

Here's another excerpt from the Frost & Sullivan analysis.

ARB approaches target SMEs (typically with a long track record of growth over 10-15 years) in the distribution and service industries who are in the early stages of their digital transformation journey to form joint ventures (JVs). These SMEs typically do not possess the funds or risk appetite to implement costly ERP solutions and are also facing operational and management inefficiencies that place a ceiling on their growth.

With the experience gained from its JVs, ARB has a better appreciation of the requirements that users (business manager etc.) deployed on the ground have. It has therefore been able to tailor its ERP portfolio to be highly aligned to the challenges that SMEs typically face which include:


• Improving management integration;
• Gaining oversight on the costs and benefits from various business activities;
• Engaging in data-driven strategic planning;
• Instituting strict financial control measures;
• ARB’s ERP solutions are also highly scalable according to the needs of its customers (particularly SMEs) especially in the following areas;
• Incorporating machine learning, AI and data analytics tools to automate operations, business intelligence and marketing purposes;
• Achieving integrated supply chain management with a focus on visibility over warehouses and inventory;
• Accommodating multi-level membership/referral programmes;
• Integrating e-wallet solutions in retail systems;
• Optimizing backend operations to improve operational efficiencies; and
• Possessing the versatility required to handle operations across a wide range of industries.

Below are the excerpts from Frost & Sullivan analysis, I thought that it would be quite a good read for new investors to understand more about ERP and IoT sector. And of course - ARB BERHAD (7181)


ARB’s key strengths include its design and development capabilities that allow it to create ERP solutions from the ground up – allowing it to craft highly customized systems that can cater to the varied needs of different industries, from retail to agriculture. In this way, ARB is able to cater to the specific needs of its target customer, who typically have very unique requirements with respect to system dashboards, customer support and applications & modules.

https://klse.i3investor.com/blogs/BabyAceStockAnalysis/2020-08-14-story-h1511705688-ARBB_7181_Part_3_Business_and_some_risk_you_should_know_By_No_1_Analyst.jsp

Conclusion:

In any investment decision made, confirm there is a risk present. You drive on the road also got risk, you take flight also got risk. Risk is always present. What is important is put all facts together and see from that angle. Make your own decision and I wish you all the best. Please bear in mind, think carefully and rationally, don't just accept what I write, you must always be sceptical. You guys are awesome, in your own way.

PS: My comments are removed on 14/8/2020 if you guys realised. Normal conversation being removed, meaning a few things:

1. The operator saw my article and comments and paid i3investor to remove those comments made.

2. Negative people complain for whatever reason making my comments and few others dissapear.

3. And FYI people who keep spreading negative things are the one who are not helping anything about the stock. Why would you sell when the fundamental are good? Even if you buy high, when you sell is confirmed is you're already make losses. Just see those who make comments asking ARBB to drop more.

4. Since my comments are removed, I will surely buy more since certain people do not like what I did. What I did is just write 3 articles of facts.

Re-read my 3 articles to make sure you have a strong convinction and confidence.

What you can do if you're looking at this Company as a long term good share?

1. Educate people by sharing this article, so they will know this Company inside out. If you see people in KLSE screener, OMG I can tell you what they write is really funny. Absolutely zero knowledge about this Company.

2. Patient, patient and patient

I'm writting to give more informed facts to potential true investors, to look into the potential of this Company. By attracting good quality investor who are informed then I can expect the share price to go up in the future. If I try to keep telling people buy buy buy there is no use. The share price won't move due to the quality of investor/shareholders of inferior quality. Everyday also so negative, how it bring good to the share?

Another thing is the operator for this counter is brutal. To understand this you need to see when this new shareholder come in to the Company and from then you see the pattern of chart. If you see 2 May 2019 at the top, this operator know how to push one. The thing is they have frustate a lot of people by 2 quarter consecutively after it is out the share start dropping. It seems they are accumulating at a certain range and push a bit make people panic. You can open the chart and see for yourself if you have time. You can see a lot of angry people due to this. Because the people behave like this everytime panic sell the operator happily follow the same method. Until your mindset change, then maybe the operator will be confused a bit. Ikan bilis not always will lose to shit head operator like that, you need to change a bit of strategy.

3. Buy as low as you can to be safe. The upside is tremendous if you believe in ARBB.

1. Complains about auditor not doing their job well. I myself had uncovered a fraud case when I'm an auditor and the director go to jail because of that. Then I ask you one thing. Why my name is not well know one ah? If your Company got fraud case, you want to publish in newspaper one ah my friend? Of course you low profile as possible, otherwise who dare do business with you? You always see in news those news that say auditor never do job well, but I tell you how many cases we caught do you even know? Audit fee for ARBB is around RM68k in total and RM36k for non audit services. Total is only around RM100k. For such a low audit fee, the partner signing the account want to risk his/her reputation? ARBB is audited by RSM which is a respectable mid tier firm. You go ask auditors if every year their work in the same Company they auditng increase or decrease please? And I tell you auditor have lots of compliance thing to comply to.

2. The quality of the investor and shareholders. An example, glove counter investors always concern about earnings first. Share price is never an issue. ARBB investors? Day in day out complain why share price don't increase although earnings is good. There is a difference in this, maybe if you look it's the same but its not. If you have a lot of investor the character is panic sell one, do you think your share can go up? A bit a bit of drop they go throw all of their shares. You tell me. And please don't underestimate idiots ok. They may be idiots, but you never know it can be that they are very rich. Maybe good in doing certain things but just when come to shares they suck. Don't underestimate this group. Idiots sometimes can be rich while you how intelligent you are might be a poor person. Sometimes no logic but my friend that's reality.

Mentality of the existing investors need to educate them and create awareness to them, accept it or not it is really up to them. I can't change them. What I can do is to write an article to create awareness. That's the only thing within my power. If you ask me how long I took to understand the whole Company, it's two days.

Dividends

Please don't ask me why this stupid Company don't give dividends? Hello, if Company is expanding rapidly and experiencing growth they won't give you dividends one la. Why? Give you dividends already how to grow fast? Company that give you dividends in general they are quite stable and most of them are rarely expanding. Take BAT as an example, not only its not expanding its performance have been terrible. I take the most easy example so you can understand.

So everything seems good with a little risk? But why a lot of people say this is a con man counter? Oh because always goreng tak jadi? Volume a lot but cannot move one?

This you need to ask the existing holders. I will tell you in summary why this Company cannot move up.

The financing for its customers is around 180 days till 210 days to pay, so the Company must have sufficient cash to sustain. Cash flow from operations in the future quarters might sometimes become negative, because they take in customer but customer not yet pay them due to credit terms have not reach. This is not a negative thing entirely because their main customers are SME and like I say they are growing. So in future quarters you need to take note on the operating cash flow. If you see announcement about conversion of ARBB-PA, you should not see as dilution but say thank you very much to those people because it's free financing and the Company need the cash. All of you curse the wrong person already.

So having said that, it is important to understand how the business operates and how certain things you can relate to it.

Understand business > See financial performance > Relate how the two works.

FA gurus won't be able to tell what I told you, because I have been in audit line for 6 years, real experience in auditing companies, so I can relate to how they do business. My clients really taught me a lot on this and of course with a little awareness and eagerness to learn I can achieve this thanks to them. FA guru how they do is read report but cannot link to how people do business. That's the difference.

I tell you aware meaning you need to take note, not to say this is very super dangerous, so RUNNNNNNNNNN. This share many people don't know, those that spread negativity due to you lacking information just make you losses. Have they tell you all the facts that all my 3 articles tell you?

Key risk area - Trade receivables

Credit terms - You need to be aware of this.

Q1 2019 Report - Credit term of 90 - 120 days

Q2 2019 Report - Credit term of 90 - 120 days, with extended grace period of 90 days. Lets just take 180 days to 210 days

Q3 2019 Report - Credit term of 90 - 120 days, with extended grace period of 90 days. Lets just take 180 days to 210 days

Q4 2019 Report - Credit term of 120 - 180 days

Q1 2020 Report - Credit term of 180 - 210 days

Q2 2020 Report - Credit term of 180 - 210 days

Having said that, in the event in the future if the Company have some borrowings, it's not a bad thing if you ask me. It's for growth. As you can see this quarter they already have net outflow of RM19mil due to this purpose.



Liabilities - No big deal. Only for the trade payables, they need to manage their supplier well to defer it as long as possible. I will go into the trade receivables part and you will understand.

(3) Intangible assets - This is software and might have some licensed rights into it. It's common in IT based company.

(4) Trade receivables - This is the risk area, which I will explain in detail later.

(5) Cash and bank balances - RM38mil (cash and bank balance plus fixed deposit). This cash pile keep increasing due to the cash flow from operations and the conversion of ARBB-PA. The conversion of ARBB-PA is actually good for the Company because it gives the Company cash without some incurring interest costs. In other words actually ARBB is a form of free financing. If you see above, the cash flow from investing activity is on the negative right? My friends you need to take cash out to develop your product or not? Or course you need if you're growing rapidly. So if "Fatty Liew" keep convert his ARBB-PA you need to thank him not curse him, because it's free financing from him to undertake some development and reinvesting in the Company.

Positive cash flow from operations - No issues positive RM15mil

(1) Property, plant and equipment - Please note that every quarter now and then, you should expect to see this increase over time? Why? Because you're doing IT, so sometimes you need to buy some equipment for you to test on your software, etc. To keep it short.

(2) Other investment - This is a new item, not specified for the time being, you can take it as investment with its JV partner. I mentioned above that they provide the investments and their JV partner witll impart their knowledge.

For (1) and (2) if you see under cash flow statements for every quarter please expect things like this (it is not something new) because you need to develop your ERP system for different segments and please bear in mind this Company is growing rapidly so you need to use money for development). Cash flow from investing activities as the name say you need to purchase certain things as invesment so your company can grow. This is different compare to cash flow from operations. Cash flow from operations means in normal operation of my business how much it is making.

For customers, they will resell the customised ERP software system and information technology outsourcing ("ITO") services.

If you are from the older generation and don't know what is ERP system and IoT I suggest you have a talk with some of your family members who are working in multinational companies to understand it further. Only by learning it, you will understand better what this company does. Usually for big companies they will use are Oracle, SAP and Microsoft.

The environment now embraces digitalisation and technology even faster, that's why you can see their business is doing well.

Since you have a bit of understanding now, I will tell you what you should be expecting this Company do. As you know collaboration with their suppliers require investments.

Below is their financial statement in balance sheet. We start with the assets parts. The main area I want to talk about is the property, plant and equipment, other investment, intangible assets, and trade receivables and cash and bank balances.

I hope you learned something about my second article for ARBB. This article I will let you know how the business operates and what risk you should be aware of.

Business Model

ARB implements a unique business model whereby it seeks to form a JV company with its target partner, where ARB will have the major controlling interest. Under the JV arrangement, the partner will provide the business know-how, while ARB will implement and periodically update its ERP solutions. The differentiating factor that makes this business model unique lies with the part where ARB will fully bear the cost of setting up the ERP solutions. Traditionally, SMEs are reluctant (or unable) to provide an upfront hefty investment on the implementation of ERP. Thus,this arrangement will entice prospective SMEs to form a JV agreement with the company. Under the JV agreement, both ARB and its JV partner are entitled to a share of profit from the JV. However, we are made to understand that in the initial years of the venture, the profits earned will be plough back for reinvestment purposes. This arrangement creates a ‘win-win situation’ whereby both parties will be able to focus on their respective field of expertise. (this part is their collaboration with their suppliers)

To be very honest, I cannot find another proxy in Malaysia market for ERP and IoT sector apart from ARBB. I'm not sure why the share price of ARBB is dropping despite good profit growth and ultra bright prospects! However, it is my chance to accumulate ARBB shares and I currently hold quite substantial amount of the company's shares.

https://klse.i3investor.com/blogs/gmarb/2020-09-02-story-h1513283648-An_article_excerpt_from_Frost_Sullivan_analysis_read_it_before_this_sto.jsp

Proven track record of expanding into adjacent verticals as in the case of Re-Energy:

- Along with its primary focus on areas like smart home and water supply management, ARB continues to expand the scope of its business via strategic partnerships and acquisitions.
- For example, it embarked on its foray into the renewable energy segment through its acquisition of C&M Renewable Energy Technology Sdn Bhd in Malaysia allowing it to leverage its capabilities in IoT related system integration and solution engineering in large-scale renewable projects in Malaysia. This acquisition not only supports ARB’s vision of supporting environmental sustainability-related activities, it also allows ARB to be in a strong position to compete in the rapidly growing green energy industry in Malaysia, which is seeking to increase the share of renewable energy sources in the country’s energy mix from 2% in 2018 to 20% in 2025.
- ARB has demonstrated the ability to expand into sectors adjacent to its current focus areas by harnessing its IoT capabilities and leveraging targeted partnerships and acquisitions – indicating the potential for future expansion and growth.

Synergies between IoT and ERP portfolios:

- ARB’s expertise in the ERP space together with its firsthand understanding of the demands that business users place on ERP systems has granted it experience regarding the suitability of dashboards, data analytics tools and data management processes. ARB carries this experience regarding effective customization over into the IoT space ensuring that the functionalities of its IoT solutions (UI, data analytics tools etc.) are in line with the business requirements of its clients.
- This focus on enhancing business outcomes distinguishes ARB from more traditional system integrators. Even established ERP vendors are in the beginning stages of augmenting their ERP offerings with IoT capabilities in this region – indicating that ARB can exploit first mover advantage with a hybrid IoT-ERP positioning.

Capabilities in large scale engagements:

The scale of IoT deployments can be defined as follows:

- Small scale: Less than 500 connected devices
- Medium scale: 500 – 10,000 connected devices
- Large scale: More than 10,000 connected devices
- ARB has demonstrated its ability to implement large scale IoT deployments, differentiating itself from its competitors who primarily occupy the small and medium scale space, leading it to be perceived as a top-tier IoT system integrator. This allows ARB to compete more effectively against larger players in future large scale implementation projects and secure collaborations with industry-leading players.
- For example, it signed an MoA with Hangzhou Mayam IoT Tech Co Ltd to potentially deploy 300,000 smart water meters (Phase one of the rollout) in a project worth RM 200 million, with ARB handling the installation, commissioning and testing of the water meters.
- It also inked an MoA with Shuifa IoT Tech Co Ltd to supply 300,000 Malaysian households with smart water filtration systems in a project worth RM 600 million.

IoT prospects for ARBB.

Ability to integrate solutions from a variety of vendors:

- In the Smart Home space, ARB has the capability to develop centralized control and monitoring solutions that can integrate a wide range of smart home devices and allow users to access these solutions via smartphone or desktop applications.

- In contrast, many of their competitors have exclusive arrangements with specific smart home hardware brands limiting their flexibility to design solutions according to property developers’ needs and budgets.

ARB approaches target SMEs (typically with a long track record of growth over 10-15 years) in the distribution and service industries who are in the early stages of their digital transformation journey to form joint ventures (JVs). These SMEs typically do not possess the funds or risk appetite to implement costly ERP solutions and are also facing operational and management inefficiencies that place a ceiling on their growth.


- The JV takes over the business operations of the SME – with the SME focusing on sales and inventory management and ARB (with the controlling interest) financing and operating a customized ERP solution and periodically providing the necessary updates and new modules, freeing up cash flow for the SME in a mutually beneficial relationship. Beyond SMEs, ARB also uses similar JV models in projects with government linked companies (GLCs).
- ARB creates value for its JV partner by providing a solution (based on its technical/business know-how) designed to generate an immediate impact on sales and profits. ARB also improves business outcomes for its network of JV partners by allowing its network of partners to cross-sell their products and/or upsell packages to end customers.
- This innovative business model addresses three major pain points for customers and vendors in the ERP market
- Customers, particularly SMEs, being unwilling to spend on costly ERP implementation (by essentially shifting from a cash/debt driven model of technology investment to an equity-based model of technology investment.)
- ERP systems becoming obsolete or unfit for customers’ changing business needs (by ensuring that the motives of the technology provider and the client are aligned via a profit-sharing model – incentivizing the technology vendor to develop a better understanding of customer requirements and provide periodic upgrades and adjustments)
- Failure of outcome-based models as vendors have very limited levers to influence performance (by giving the technology provider direct managerial oversight to ensure that its ERP solution is being implemented alongside optimal business and workflow processes)

https://klse.i3investor.com/blogs/gmarb/2020-09-01-story-h1512630177-An_article_excerpt_from_Frost_Sullivan_analysis_read_it_before_this_sto.jsp