16 July 2014
ACE Market-listed technology company TFP Solutions Bhd expects its overseas business to contribute up to 40% of its revenue in three years from 10% currently as it makes inroads into the Asean markets.
Executive director Dr Chew Seng Poh said the company is eyeing the growth in the region and for a start, it has made investments in Indonesia and Cambodia last year. It now has representative offices and marketing teams there to grow its business.
"We're cautious with investing overseas. We used to go with partners and now we're slowly moving to have sales representatives there and moving into the region. We're not going to rush into it (overseas business) and get ourselves there. We're doing it on a prudent basis and making sure we put it on a right start," he told SunBiz in an interview recently.
He said Indonesia and Cambodia are in a growth path where there will be investments in hardware and eventually professional services, including cloud computing and big data where businesses harness their investments of IT hardware.
"There's where our business come in and we have the right composition in the marketplace. Indonesia and Cambodia seem to be the right platform for us but of course we're still exploring other countries," said Chew.
He said to slowly depend on its business in one country (Malaysia) is not sustainable in the long term. Hence it is important for the company and also in its natural progression to expand into Asean to capitalise on the bigger trading platform.
"The Malaysian economy is small compared with Thailand and Indonesia. If we can take a small slice of whatever they have, it's a big contribution to our business. We would also need to expand as an Asean player, which is our vision," said Chew.
With an order-book of RM30 million, TFP is also looking at making acquisitions to strengthen its business pillars, which are converged infrastructure solutions (CIS) and business management solutions (BMS).
CIS, which includes cloud computing, currently contributes up to 70% of its revenue while the remaining is from BMS, which includes big data. This revenue trend is expected to persist moving forward as CIS consist mostly of hardware, servers and storage, which contributes to a larger chunk of the revenue. BMS, on the other hand, are more software and professional services-related.
Chew said cloud computing and big data are two major thrusts in the IT industry today and TFP addresses these two market segments when most companies only do one.
"There is big potential growth in cloud computing and big data and at the same time, the convergence of these two technologies into one common platform is becoming more prevalent and we're in a good position to address these markets," said Chew.
Meanwhile, Chew said its BMS pillar is expected to benefit from the impending implementation of the goods and services tax (GST) as there will be demand for its GST professional services as businesses move towards becoming GST-ready.
"The GST processes are complex and what we're trying to do is come out with simple and standard packages for customers."
This means that instead of hiring IT personnel and tax consultants, TFP will bundle these into one from a process standpoint to come up with new product and services to ensure its customers' systems are GST-compliant.
"We're looking at consultants to partner with us and provide more solutions to the small and medium enterprise (SME) market so customers would be able to deploy GST faster and in lower costs. There's a big market on GST and we see a lot of potential for us to address the existing market base plus new customer base to do GST implementation," said Chew.
However, he added that although GST will drive the profit of BMS, it would not touch the top line numbers because contribution from CIS would naturally be more.
On whether the company sees itself transferring to the Main Market soon, Chew said: "We're confident we will eventually move to that direction and that's our goal but we're not here to set any timeline. Getting more funds in the capital market is one of our directions to get more funds to do more business."
Chew said TFP wants to ensure sustainability by having the right core competencies and efficiencies that drive profitability.
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