Systech to strengthen foothold in US, China

CE Market-listed Systech Bhd, which aims to move to the Main Market of Bursa Malaysia in five years' time, plans to invest further to expand its business in China and the US, said its non-independent non-executive director Tan Hock Soon.

"In terms of expansion of markets, we're looking at China and the US. These are the two markets we intend to expand. We just started off there towards the end of last financial year and this year, hopefully, we'll push a little bit more," he told SunBiz after the company's AGM yesterday.

Hock Soon said at the moment, its business in the two markets are small and it is looking to establish stronger footholds on both countries.

"We are getting a foothold in China, in the direct-selling companies as well as the franchise business and from there hopefully we get more customers," he added.

Systech, via its core subsidiary Syscatech Sdn Bhd, provides software solutions. It is involved in the design, research and development, customization and implementation of web-based solutions for members centric industry such as the direct-selling industry, multi-level marketing and retail industry.

"In Southeast Asia we have a very big foothold. We are in Thailand, Singapore, Indonesia, the Philippines, Malaysia, Hong Kong and Korea. We're pretty strong in Southeast Asia and now we have China and the US," said Hock Soon.

Its CEO, Raymond Tan, said in China and the US, Systech works with partners that re-sell its products instead of going there directly.

"We already have partners there. The cost to enter these markets is nominal … so far, if we can do business in these two markets, it's big enough for us. We also don't want to divert too far, we still focus on what we are already doing," he said.

"We rely on consultants (overseas) but the bulk of the work is done in Malaysia. All our software is over the internet. So all the support work and others are done in Malaysia," said Hock Soon.

Systech was listed on the ACE Market on June 15, 2011. Its net profit grew from RM1.13 million in the financial year ended March 31, 2012 (FY12) to RM2.61 million in FY13.
In FY14, net profit fell to RM1.78 million mainly due to the rise in operating cost and higher income tax provision following the expiry of the pioneer status of Syscatech.

Its revenue grew from RM5.86 million in FY12 to RM6.85 million in FY13. In FY14, revenue fell to RM6.77 million.

The company declared 5% dividend for FY13. Yesterday, shareholders approved its second dividend payment via a single tier final dividend of 3% per share for FY14, to be paid on Sept 26.

According to Raymond, it currently does not have a dividend policy but hopes to have one in the future.