Presentation on theme: "1. By accepting this document, & in consideration for it being made available to such recipient, each recipient agrees to keep strictly confidential the."— Presentation transcript:
By accepting this document, & in consideration for it being made available to such recipient, each recipient agrees to keep strictly confidential the information contained in it & any information otherwise made available by Macromac Plc (the "Company"), whether orally or in writing. In the case of a corporate recipient, this presentation may only be disclosed to such of its directors, officers or employees who are required to review it for the purpose of deciding whether to make an investment in the Company. This document has been provided to each recipient at their request, solely for their information, & may not be reproduced, copied, published, distributed or circulated, to any third party, in whole or in part, or published in whole or in part for any purpose, without the express prior consent of the Company. The purpose of this document is solely to provide information to persons who have expressed an interest in investigating the possibility of investing in the Company. The information contained in this confidential document (the “Presentation”) has been prepared & distributed by the Company. It has not been fully verified & is subject to material updating, completion, revision, verification & further amendment. This Presentation has not been approved by an authorised person in accordance with Section 21 of the Financial Services & Markets Act 2000, as amended (“FSMA”). This Presentation does not constitute, & the Company is not making, an offer of transferable securities to the public within the meaning of sections 85B & 102B of FSMA & it is being delivered for information purposes only to a very limited number of persons & companies who are persons who have professional experience in matters relating to investments & who fall within the category of persons set out in Article 19 of the Financial Services & Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or are high net worth companies within the meaning set out in Article 49 of the Order or are otherwise permitted to receive it (together, the "Relevant Persons"). This Presentation is directed only at Relevant Persons & must not be acted on or relied upon by persons who are not Relevant Persons. Any other person who receives this Presentation should not rely or act upon it. By accepting this Presentation & not immediately returning it, the recipient is deemed to represent & warrant that: (i) they are a person who falls within the above description of persons entitled to receive the Presentation; & (ii) they have read, agree & will comply with the contents of this notice. Prospective investors must rely on their own examination of the legal, taxation, financial & other consequences of an investment in the Company, including the merits of investing & the risks involved. Prospective investors should not treat the contents of this Presentation as advice relating to legal, taxation or investment matters & are advised to consult their own professional advisers concerning any acquisition of shares in the Company. Certain of the information contained in this Presentation has been obtained from published sources prepared by other parties. Certain other information has been extracted from unpublished sources prepared by other parties which have been made available to the Company. The Company has not carried out an independent investigation to verify the accuracy & completeness of such third party information. No responsibility is accepted by the Company or any of its directors, officers, employees or agents for the accuracy or completeness of such information. All statements of opinion and/or belief contained in this Presentation & all views expressed represent the directors’ own current assessment & interpretation of information available to them as at the date of this Presentation. In addition, this Presentation contains certain "forward-looking statements", including but not limited to, the statements regarding the Company’s overall objectives & strategic plans, future commercial production, production targets, timetables, capital expenditures, work programs, budgets & targets, reserve & resource estimates & outlook, & safety & sustainability initiatives. Forward-looking statements express, as at the date of this Presentation, the Company’s plans, estimates, forecasts, projections, opinions, expectations or beliefs as to future events, results or performance. Forward-looking statements involve a number of risks & uncertainties, many of which are beyond the Company’s control, & there can be no assurance that such statements will prove to be accurate. Therefore, actual results & future events could differ materially from those anticipated in such statements. Risks & uncertainties that could cause results of future events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, factors associated with fluctuations in the market price of materials, industry risks & hazards, uncertainty as to estimation of reserves & resources, requirements of additional financing risk, risks of delays in construction, production, obtaining permits, competitive pressures, changes in the regulatory framework & prevailing macroeconomic conditions & other risks. No representation is made or assurance given that such statements or views are correct or that the objectives of the Company will be achieved. The reader is cautioned not to place reliance on these statements or views & no responsibility is accepted by the Company or any of its directors, officers, employees or agents in respect thereof. The Company does not undertake to update any forward-looking statement or other information that is contained in this Presentation. Neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the information contained in this Presentation or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation. Allenby Capital Limited (“Allenby Capital”) which is authorised & regulated in the United Kingdom by the United Kingdom Financial Conduct Authority Allenby Capital is acting exclusively for the Company as its nominated adviser & for no-one else in relation to the matters described in this Presentation & is not acting for any recipient of this Presentation & will not be responsible to anyone other than the Company for providing the protections afforded to clients of Allenby Capital nor for providing advice to any person other than the Company in relation to the contents of this Presentation. Allenby Capital has not authorised the contents of, or any part of, this Presentation. Neither the issue of this Presentation nor any part of its contents is to be taken as any form of contract, commitment or recommendation on the part of the Company or the directors of the Company to proceed with any transaction or accept any offer & the right is reserved to terminate any discussions or negotiations with any prospective investors. The Company reserves the right without any notice or liability to the recipient of this Presentation or its advisers to: (i) change any of the procedures, timetable or requirements or terminate negotiations at any time prior to the signing of any binding agreement with investors; (ii) provide different information or access to information to different persons; (iii) agree variations to the property, rights & liabilities comprised in the Company; & (iv) to negotiate at the same time with more than one person. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. This Presentation should not be considered a recommendation by the Company or Allenby Capital or any of their respective affiliates in relation to any prospective acquisition of shares in the Company. No undertaking, representation, warranty or other assurance, express or implied, is made or given by or on behalf of the Company, Allenby Capital or any of their respective affiliates, any of their respective directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this Presentation & no responsibility or liability is accepted for any such information or opinions or for any errors or omissions. 2
Marketing & Sales for Messaging Services Mobile Content Creation, Aggregation & Messaging Services Software Solutions (Proprietary & Customized) Research & Development Enterprise Web Development & SEO Services Web / Mobile Apps Development 1 MSC & Pioneer Status Companies 4
Act as mobile content aggregator, mediating SMS & MMS-based transactions between parties & Content Providers / Brand Owners & Mobile Telcos to reach mobile end-users. Producing proprietary mobile contents for mobile end-users. Develop in-house proprietary software solutions. (eg. I-track, Volkout) Develop client-&-purpose-specific software solutions. (eg. e-IC, D’Sign & Geolocation) Website Development Social Media Integration E-commerce Solutions integration Search Engine Marketing & Optimisation 5
6 Market share of MACROMAC in the mobile content services industry in Malaysia for the year 2012 is estimated to be 0.5 percent. Source: Protégé Associates Malaysia 2012 BREAKDOWN OF ESTIMATED NUMBER OF PARTICIPANTS IN THE MOBILE CONTENT SERVICES INDUSTRY IN MALAYSIA PARTICIPANTESTIMATED NUMBER OF PARTICIPANTS DESCRIPTION Mobile Network OperatorsMore than 10Mobile network operators & mobile virtual network operators (“MVNOs”) which purchase airtime at wholesale rates from mobile network operators & resell wireless subscription to customer through its own branding & other value-added services. There are 3 major operators in Malaysia: Maxis, Celcom & Digi, with the rest being smaller network operators & MVNOs. AggregatorsMore than 50Participants which provide mobile messaging platforms to the content developers/providers. They act as the bridge between content providers & mobile network operators. Some aggregators are involved in the development & provision of contents. Content Developers / Providers More than 300Involved in the development & provision of content. Content providers typically depend on the messaging platform of aggregators to access operator’s networks as a means of disseminating contents to mobile users.
SMS & MMS SERVICES HAS A STRONG ESTABLISHED DEMAND IN MALAYSIA 1 1 Refer Appendix (Slide 27) INCREASING MOBILE LIFESTYLE BY CUSTOMERS & THEIR DESIRE TO PERSONALISE 2 2 Refer Appendix (Slide 27) THE MOBILE CONTENT SERVICES INDUSTRY IN MALAYSIA IS PROJECTED TO GROW AT CAGR OF 6.6 % FOR THE PERIOD OF 2012 TO 2017 3 3 Refer Appendix (Slide 27 & 29) IT WAS ESTIMATED THAT THE REVENUE FROM SMS & MMS SWELL MORE THAN 40 % FROM 2011 & VALUE AT MORE THAN 40 BILLION BAHT IN 2012 IN THAILAND 4 4 Refer Appendix (Slide 30) 7
FYE 31 DEC (AUDITED) 2010 (AUDITED) 2011 (AUDITED) 2012 (AUDITED) As at 30 June 2013 (Unaudited) REVENUE (MYR)34,921,56428,059,46919,966,0209,977,584 GROSS PROFIT (MYR) 8,781,48811,154,02810,640,3164,456,558 GP MARGIN (%)25.1%39.8%53.3%44.7% EBITDA (MYR)6,742,9199,369,1929,027,2313,249,270 EBITDA MARGIN (%) 19.3%33.4%45.2%32.6% NET PROFIT (MYR)6,111,7228,436,7108,060,7602,936,629 NP MARGIN (%)17.5%30.1%40.4%29.4% 9
PRODUCTS & SERVICES Gross Margin (2012) Gross Margin (2011) Gross Margin (2010) Group Margin (2009) Gross Profit CAGR Group contribution (2012) Group contribution (2009) Mobile Content Creation, Aggregation & Messaging Services 53.4%39.5%25.1%22.3% 34.14% 83.7%100% Software Solutions 15%0% Web Development & Search Engine Optimisation Services 1.3%0% 10 As at 30 June 2013 (Unaudited)
As at FYE 31 Dec 2010 (Audited)As at FYE 31 Dec 2011 (Audited) As at FYE 31 Dec 2012 (Audited) As at 30 June 2013 (Unaudited) MYR PROPERTY, PLANT & EQUIPMENT819,3789,325,4627,380,0337,315,722 CURRENT ASSETS Trade receivables1,760,1575,530,5028,320,1687,930,743 Other receivables2,417,2262,009,6471,477,0531,937,246 Cash in h& & at bank5,173,2585,886,5204,509,4345,501.976 9,350,64113,426,66814,306,65515,369,965 CURRENT LIABILITIES Trade payables305,4272,969,5622,360,4771,425,204 Other payables & accruals547,4351,174,7231,990,857862,055 Provision for taxation212,897136,834194,60295,406 Term loan-309,751344,700 Hire purchase payables153,001224,430164,551 1,218,7604,815,3005,055,1873,294,716 NET CURRENT ASSETS8,131,8818,611,3689,251,46812,075,249 8,951,25917,936,83016,631,50119,390,971 FINANCED BY Share capital210,000 Inappropriate profit8,257,72311,742,11510,716,78513,663,416 SHAREHOLDERS' EQUITY8,467,72311,952,11510,926,78513,873,416 LONG TERM & DEFERRED LIABILITIES Term loan-5,199,3225,493,8045,789,653 Hire purchase payables483,536723,393202,865122,655 Deferred taxation-62,0008,047 8,951,25917,936,83016,631,50119,390,971 11
12 As at FYE 31 Dec 2010 (Audited) As at FYE 31 Dec 2011 (Audited) As at FYE 31 Dec 2012 (Audited) As at 30 June 2013 (Unaudited) MYR NET PROFIT BEFORE TAXATION (A)6,441,5398,764,5788,260,7602,936,629 ADJUSTMENT FOR ITEMS NOT REQUIRING OUTFLOW OF FUNDS (B)104,901134,97924,75578,209 OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES (C=A+B)6,546,4408,899,5578,285,5153,014,838 CHANGES IN WORKING CAPITAL (D)(1,924,464)(233,659)(2,286,513)(2,134,843) NET CASH GENERATED FROM OPERATING ACTIVITIES (E= C-D)4,621,9768,665,8985,999,002879,995 CASH FLOW FROM INVESTING ACTIVITES (F)(193,576)(2,973,920)1,600,330(103,091) CASH FLOW FROM FINANCING ACTIVITIES (G)(53,002)(4,978,716)(8,976,419)(215,639) NET (DECREASE)/INCREASE IN CASH & CASH EQUIVALENTS4,375,398713,262(1,377,087)992,543 CASH & CASH EQUIVALENTS B/F797,8605,173,2585,886,5204,509,433 CASH & CASH EQUIVALENTS C/F (K=H+J)5,173,2585,886,5204,509,4335,501,976
PRODUCTS & SERVICES AS AT 30 JUN 2013 REVENUES (MYR’000) AS AT 30 JUN 2013 REVENUES (%) AS AT 30 JUN 2013 GROSS MARGIN (%) KEY PRODUCTS & SERVICES MOBILE CONTENT CREATION, AGGREGATION & MESSAGING SERVICES 7,26872.8%44.0% PREMIUM MESSAGING BULK MESSAGING SOFTWARE SOLUTIONS 2,64126.5%45.6% I-TRACK VOLKOUT E-IC GEOLOCATION D’SIGN WEB DEVELOPMENT & SEARCH ENGINE OPTIMISATION (SEO) SERVICES 680.7%81.5% WEBSITE DEVELOPMENT SOCIAL MEDIA INTEGRATION E-COMMERCE SOLUTIONS SEARCH ENGINE MARKETING & OPTIMISATION 9,977100.0% 13
16 Organic Growth Merger & Acquisition Growth IMPROVING THE ORGANIC BUSINESS GROWTH IN MASSAGING PLATFORM SERVICE INDUSTRY VIA NEW MARKET EXPANSION GEOGRAPHICALLY & DIVERSIFY THE GROUP BUSINESS SEGMENT TO MOBILE GAMING INDUSTRY.IMPROVING THE ORGANIC BUSINESS GROWTH IN MASSAGING PLATFORM SERVICE INDUSTRY VIA NEW MARKET EXPANSION GEOGRAPHICALLY & DIVERSIFY THE GROUP BUSINESS SEGMENT TO MOBILE GAMING INDUSTRY. MACROMAC IS ACTIVELY LOOKING FOR SUITABLE MERGER & ACQUISITION OPPORTUNITIES TO EXPAND ITS BUSINESS ON EXPONENTIAL BASIS.MACROMAC IS ACTIVELY LOOKING FOR SUITABLE MERGER & ACQUISITION OPPORTUNITIES TO EXPAND ITS BUSINESS ON EXPONENTIAL BASIS. UNLOCK PRESENT ASSET VALUE & PLAN TO LIST GROUP’S SUBSIDIARY IN HONG KONG STOCK EXCHANGE AT 2014 THROUGH THE FURTHER CORPORATE EXERCISE.UNLOCK PRESENT ASSET VALUE & PLAN TO LIST GROUP’S SUBSIDIARY IN HONG KONG STOCK EXCHANGE AT 2014 THROUGH THE FURTHER CORPORATE EXERCISE.
LONDON MALAYSIA (HQ) THAILAND INDONESIA 17 THE GROUP INTENDS TO EXPAND ITS CONTENT AGGREGATION & MOBILE MESSAGING SERVICES IN 2014. THE GROUP INITIALLY LAUNCHED IN DECEMBER 2012 & THE GROUP IS DELIVERING LOCALISED CONTENT TO LOCAL MOBILE USERS IN THAILAND. LEVERAGE ON AIM LISTING TO GAIN REPUTATION & FINANCIAL SUPPORT IN ORDER TO EXPAND THE GROUP’S BUSINESS WORLDWIDE. CONTINUOUS ORGANIC GROWTH AS A SPECIFIC MESSAGING PLATFORM PROVIDER & CONTINUALLY EXPAND OUR BUSINESS IN ASIAN COUNTRIES. Hong Kong PLANNING HONG KONG STOCK EXCHANGE LISTING AS EFFECTIVE APPROACH FOR COMPANY’S GROWTH & EXPANSION
UNAUDITED AS AT 31 JUNE 2013 (HALF YEAR RESULT) 31 JULY 2013 (MONTHLY RESULT) 31 AUGUST 2013 (MONTHLY RESULT) RM RM Revenue7,602,2481,627,4081,377,831 Cost of sales (3,279,027)(1,641,843)(1,094,570) Gross Profit 4,323,221(14,435)283,261 Other Income 27,79355,1942,742 Operating & Administrative Expenses (1,404,321)(255,159)(203,291) Operating Profit 2,946,693(214,400)82,712 Finance Cost (143,400)(24,351)(23,900) Profit Before Tax (PBT) 2,803,293(238,751)58,812 Taxation(89,194)(11,499)(30,591) Profit After Tax (PAT) 2,714,099(250,250)28,221 18
UNAUDITED AS AT 31 JUNE 2013 (HALF YEAR RESULT) 31 JULY 2013 (MONTHLY RESULT) 31 AUGUST 2013 (MONTHLY RESULT) RM RM Revenue2,375,336271,737231,924 Cost of sales (2,241,999)-- Gross Profit 133,337271,737231,924 Operating Profit 133,337271,737231,924 Profit Before Tax (PBT) 133,337271,737231,924 Profit After Tax (PAT) 133,337271,737231,924 19
20 SNIFF AGENT SILVERWARE ONLINE COMMUNITY- BASED FORMING GAME WITH A SERIES OF FUN & EXCITING MINI-GAME. THIS WILL BE RELEASE ON DESKTOP (FACEBOOK) & MOBILE PLATFORM (INCL. ANDROID, & IOS). ONLINE COMMUNITY- BASED FOOTBALL MANAGEMENT GAME FOR DESKTOP & MOBILE PLATFORMS (INCL. ANDROID, & IOS). THE GROUP STRIVE TO KEEP AT THE FOREFRONT OF THE MOBILE GAMING INDUSTRY IN THE FUTURE & FOLLOW ALL MODERN TECHNOLOGY INNOVATIONS. THE GROUP ONGOING RESEARCH & DEVELOPMENT PROGRAM IS AIMED AT INTRODUCING PLAYER-FRIENDLY ADVANCEMENTS IN THE GROUP CUTTING-EDGE SOLUTIONS. WORKING TOGETHER ON THE CURRENT GAMING TECHNOLOGY ADVANCEMENTS, THE GROUP LAY THE BASIS FOR THE FUTURE PROSPERITY OF MOBILE GAMING BUSINESS.
M&A GROWTH PLAN FOR HONG KONG LISTING THE MERGERS & ACQUISITIONS CAN INCREASE IN VALUE GENERATION, INCREASE IN COST EFFICIENCY & INCREASE IN MARKET SHARE FOR THE GROUP. THE M&A TARGET IN BOTH THAILAND & INDONESIA, IN ORDER TO ACHIEVE THE STRATEGIC PURPOSES AS BELOW: ENTER THE MARKET MORE EFFECTIVE & INCREASED MARKET SHARE IN A SHORTER PERIOD ACHIEVE ADMINISTRATIVE BENEFITS FINANCIAL LEVERAGING & IMPROVE PROFITABILITY & EPS ADVANTAGES GATEWAY TO MAINLAND CHINA & THE REST OF ASIA MAINLAND CHINA’S GROWTH RESPECTED & WELL ESTABLISHED LEGAL SYSTEM INTERNATIONAL ACCOUNTING STANDARDS REGULATORY FRAMEWORK FREE FLOW OF CAPITAL ADVANCED CLEARING & SETTLEMENT INFRASTRUCTURE & FINANCIAL SERVICES WHY ? BETTER ACCESS TO CAPITAL FOR GROWTH HIGHER PROFILE & VISIBILITY INCREASED CORPORATE TRANSPARENCY IMPROVED CORPORATE GOVERNANCE GREATER EMPLOYEE COMMITMENT LOCK IN THE GREAT CHINA MARKET 21
Lew Shau Kong (known as Michael), Executive Director, Executive President aged 37 Lew Shau Kong is the Executive President of the Company & the Macromac Group. He is responsible for indentifying, developing & implementing the Group’s business strategy & direction. After graduating from high school, Mr Lew obtained a certification from the Malaysian Insurance Institute to enable him to legally act as an insurance agent in Malaysia. In 1995, he joined Lean Giap Ent Sdn Bhd, a building materials company as a sales executive, where he was involved in distributing roofing materials to a number of major state government construction projects in Pahang, Malaysia. After a short period of time, he joined Elken Sdn Bhd, a direct selling company later in the same year, where he enjoyed considerable success due to his sales capabilities. In 1996, he set up ML Construction as a sole proprietor offering sub-contractor services for construction projects. In 1999, he set up Micro Magna Marketing in partnership with Macromac’s CEO Khoo Tiong Keat. The company was primarily involved in the provision of stationery supplies & office equipment to Government departments. In 2000, he co- founded Macromac Corporation (M) Sdn Bhd, which was principally involved in the photocopy & office equipment leasing business, where he was put in charge of overseeing overall operations & marketing tasks. In 2006, under the Macromac umbrella, he became part of the founding team of MTSB as its Executive President. Under his supervision, the Group successfully established a profitable product/service offering & a sustainable business model to ensure continued growth for the Group moving forward. Khoo Tiong Keat (known as Andrew), Executive Director, Chief Executive Officer, aged 37 Khoo Tiong Keat is the Chief Executive Officer of Macromac. As CEO, he is primarily involved in Group’s key management & day-to-day operations, ensuring the successful execution of the Group’s plans. Mr Khoo qualified with a Diploma from the Chartered Institute of Marketing (Sunway College, Malaysia) in 1999. He commenced his career as a Sales Executive with Lean Giap Ent Sdn Bhd, a building materials distributor in 1995. In 1997, he joined L&M Corporation Bhd, another building materials company as a Sales executive. In 1999, he set up Micro Magna Marketing in partnership with Macromac Group’s Executive President, Lew Shau Kong. The company was primarily involved in the provision of stationery supplies & office equipment to government departments. In 2000, he co-founded Macromac Corporation (M) Sdn Bhd. In 2006, under the Macromac Group umbrella, he became part of the founding team of MTSB as its CEO. Mr Khoo’s vision & leadership thus far have been key factors to the Group’s success, & continues to be a driver of growth for the Group moving forward. 25
KC Chong, Executive Director, Finance Director aged 45 Mr. KC Chong is a Certified Practicing Accountant (Australia) & a Chartered member of the Malaysia Institute of Accountants. Mr Chong has over 25 years’ experience working in accounting & financial industries. He has been involved in the management of private &public companies since 1991. His notable experiences include functioning as Head of reputable stock broking companies, as well as CFO of publicly quoted companies listed on AIM, Malaysia, Singapore & Hong Kong. Mr Chong is currently sitting on the board of Borneo Aqua Harvest Bhd as its Independent Non-Executive Director & Audit Committee Chairman. Ho Wei Lih (known as Alvin), Executive director, Chief Business Officer,aged 31 Ho Wei Lih is the Chief Business Officer of the Company. He is responsible for overseeing the Group’s business development & sales functions, & is responsible for developing new revenue sources for the Group. In April 2004 Mr Ho joined Ho Trading, a family business involved in the provision of truck hire & logistics services for transportation of goods. In 2006, he became part of MTSB’s founding team, & has since been involved in heading the Group’s business development markets. Among his achievements in his current role include increasing the Group’s profits from below RM1million in 2006 to over RM6 million in 2012, achieving a consistent profit growth of over 20 percent per year, facilitating MTASB’s acquisition of the MSC status, & now, expanding the Group’s business reach beyond Malaysia to the Thai market. Oh Hong Lian (known as Joseph), Executive director, Chief Technical Officer,aged 31 Mr. Oh Hong Lian is the Chief Technical Officer of the Company. He is responsible for executing the technological direction of the Group’s proprietary mobile content aggregation & messaging platform, the MMP. His tasks include planning the development & design of the Group’s flagship product, as well as managing the overall operations of its technology division. Mr Oh graduated with a Diploma in Creative Multimedia from Saito Academy, Malaysia in 2004. In 2004, he commenced his career as a designer at Bluedale Media Sdn Bhd, where he developed print & interactive web advertising content. He also began developing mobile content such as wallpapers & animations. In 2005, he moved to MCOM Media Technology Sdn Bhd, where as a web designer, he was involved in website design, maintenance & programming. In 2006, he became a part of MTSB’s founding team as its chief programmer. Here, he planned, designed & developed the MMP platform for easy content aggregation & distribution from content providers to mobile users. The MMP platform was launched for operation in 2007. 26
David Sherick, Independent Non-Executive Director, Aged 70 Mr. David Sherick is a Fellow of the Institute of Chartered Accountants in England & Wales (ICAEW) & has held posts at various academic institutions in both the UK & Hong Kong. He is member of the Institute of Internal Auditors for which he was the North Pacific Regional Director & also served on its Advanced Technology Committee & the International Relations Committee. Mr Sherick was the first chairman & founder member of the Forum for International Irregular Network Access, a member of the Association of Certified Fraud Examiners & a member of Hong Kong Chapter of American Society for Industrial Security. He is a Non-Executive Director of Resource Holding Management, an AIM listed media business based in Malaysia, & was, until 31 st July 2008, the director of risk management & legal services of Thus Group PLC (listed on the main market of London Stock Exchange). He has over 30 years’ experience working with the telecommunications industry, with tenures at Hong Kong Telecom PLC, Cable &Wireless PLC (Hong Kong), & providing consultancy services to PCCW PLC (Hong Kong) & Maxis Bhd (Malaysia). Mr Sherick also has over 30 years’ experience working in financial capacities, with key expertise in revenue assurance, internal audit & risk management. David Mathewson, Independent Non-Executive Chairman, Aged 65 Mr. David Mathewson is an experienced non-executive director & a member of the Institute of Chartered Accountants of Scotland having qualified in 1972. He has sat on the board of a number of publicly listed companies including investment trusts over the past 20 years as Non-Executive Director or Chairman. Mr Mathewson has had an international career in finance& merchant banking up to 2001, with significant banking& advisory experience having been a director of Corporate Finance at Noble Grossart Limited & a Non-Executive Director of Noble & Company. He was previously Non-Executive Chairman of Sportech PLC, a software, gaming & lottery company listed on the London Stock Exchange Main market, & Non-Executive Chairman of Asian Growth Properties, a Hong Kong property company listed on AIM. He has been a Non-Executive Director of Robertson Group Ltd (UK), Edinburgh UK Tracker Trust PLC & Playtech Ltd (FTSE 250). He retired as Finance Director of Playtech Ltd in December 2012. David is a member of the audit committee & the remuneration committee. 27
Remains promising & is clearly heading in the right direction. Total number of cellular telephone subscriptions is over 36 million in 2011. Total number of cellular telephone subscriptions in 2000 was only 5,122,000. Continued expansion in 2012 by registering a total of 41,074,000 subscriptions, a 12 percent increase from 2011. The Growth of Cellular Telephone Subscriptions in Malaysia, 2001- 2012 29
Growth of cellular telephone subscriptions in Malaysia has remained strong moving into 2012. prepaid subscriptions dominate the cellular telephone market in Malaysia with 29,595,000 subscriptions recorded in 2011 prepaid subscriptions account for 80.7 percent of the total cellular telephone subscriptions in 2011 Prepaid subscription expanded 13.8 percent to 33,673,000 subscriptions Post-paid subscription improved 4.7 percent to 7,401,000 subscription respectively from 2011 to 2012 Cellular telephone penetration rate in Malaysia had surpassed 100.0 per 100 inhabitants for 2011 & stood at 141.6 per 100 inhabitants in 2012 The Cellular Telephone Penetration Rate in Malaysia, 2001- 2012 Notes: The cellular telephone penetration rate refers to the total subscriptions divided by the total population & multiplied by 100 A cellular telephone penetration rate over 100 percent can occur because of multiple subscriptions The subscription data also includes Third Generation (“3G”) subscriptions The Growth of Cellular Telephone Subscriptions in Malaysia, 2001 - 2012 30
The Estimated & Forecast Size of the Mobile Content Services Industry in Malaysia, 2012-2017. Mobile Content Services Industry in Malaysia Valued at RM 3.09 billion in 2012 Projected to continue growing between 2013 to 2017 at a CAGR of 6.6 percent. Expected to be valued at RM 4.24 billion in 2017. Positive Outlook on the Demand for Mobile Content Services in Malaysia. Growing (and diversifying) usage of mobile content services Increasing cellular telephones subscription & penetration Increasing desire to personalise by mobile users. Government support towards E-payment. Smartphone penetration is escalating & mobile users gradually switching their preference from paid mobile content to unlimited media content & supply. Despite that, the mobile content services industry is expected to remain sustainable due to the medium used to channel content. SMS & MMS services has a strong established demand in Malaysia. Its ubiquitous availability as a fundamental application in all types of cellular telephones is envisaged to drive the usage of mobile content services in mobile banking, mobile advertising & text voting sectors. 31
Mobile content services in Malaysia are offered via SMS, MMS & WAP. Mobile content services in Malaysia can be segregated into four main facets as follows:- The provision of content to any person, including but not limited to information, news update, data, joke, greeting message, ringtone, wallpaper etc for which charges may or may not be imposed to customer; The provision of service to any person, including but not limited to chat service, participation in contest, fundraising & voting; A combination of provision of content & service; and SMS broadcast or bulk SMS which can be channelled via SMS, MMS & WAP MOBILE PHONE PERSONALISATION Ring tones (Monophonic, Polyphonic, True Tone) Graphics Logo, Picture Message, Colour Wallpaper, Animation, Theme) Java Games Strategy, Puzzle, Action, Racing. INFOTAINMENT Sports News; Gaming Results; Updates; Gossip; Feng Shui Tips; and Advice INFORMATION World & Financial News; Weather Forecast; Stock Alert; & Prayers Information BANKING & FINANCIAL SERVICES Transaction Authorization Code; Alert & Notification; and E-Commerce COMMUNICATION Chat; Find a Friend, & Share a Joke, Stories etc OTHERS Text Donation; Text Voting MOBILE CONTENT SERVICES 32
The Historical, Estimated & Growth Forecast for the Mobile Content Services Industry, 2011-2017 CAGR (2012-2017) = 6.6 percent Note: All figures are rounded; the base year is 2012 33
POTENTIAL MARKET IN THAILAND STARTED TO ENTER THAILAND MARKET IN DECEMBER 2012 OVER 80 MILLION MOBILE SUBSCRIPTIONS IN THAILAND, WITH A MOBILE PENETRATION RATE EXCEEDING 120% IN 2012. MOBILE PHONE USAGE IS HIGHLY POPULAR IN THAILAND SMARTPHONE PENETRATION & 3G SUBSCRIPTION REMAIN MODERATE, THUS LIMITING CONSUMPTION OF RICH MOBILE CONTENT SMARTPHONE PENETRATION WAS BELOW 40% IN 2012, WHILE THE FULL COMMERCIAL ROLLOUT OF 3G SERVICES NATIONWIDE HAS YET TO BE ACCOMPLISHED SMS & MMS REMAINED AN ESSENTIAL COMMUNICATION APPLICATION FOR MOBILE USERS IN THAILAND. IT WAS ESTIMATED THAT THE REVENUE FROM SMS & MMS SWELL MORE THAN 40 % FROM 2011 & VALUE AT MORE THAN 40 BILLION BAHT IN 2012. POTENTIAL MARKET IN INDONESIA INDONESIA REGISTERED MORE THAN 260 MILLION IN MOBILE SUBSCRIPTION, WITH MOBILE PENETRATION EXCEEDING 100 PERCENT IN EARLY 2012. SMARTPHONE PENETRATION IMPROVED FROM ITS PRECEDING YEAR & ATTRIBUTED BY HIGHER DISPOSAL INCOME AMONG THE NATIONS WHICH ENABLE THEM TO SPEND ON SECONDARY NEEDS, SUCH AS SMART PHONES. SMS AS A FUNDAMENTAL COMMUNICATION APPLICATION IS STILL WIDELY USED BY MOBILE USERS, PROVEN BY HIGHER SMS REVENUE REGISTERED BY MAJOR TELECOMMUNICATION CARRIERS IN THE COUNTRY. INDONESIA’S LARGEST TELECOMMUNICATION CARRIER, PT TELEKOMUNIKASI SELULAR, OR TELKOMSEL, SAW A 13 PERCENT IMPROVEMENT IN ITS SMS TRAFFIC IN 2012, WHILE REVENUE PER SMS INCREASED 4 PERCENT IN THE SAME YEAR. BESIDES THAT, SMS REVENUE OF PT INDOSET TBK & PT XL AXIATA TBK ESCALATED 66 PERCENT & 16 PERCENT RESPECTIVELY FROM 2011 TO 2012. 34
35 Global Video Games Sector Revenue ($ Billion)Software As A Service (Saas) Global Market (& Billion) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 100 80 60 40 20 0 US$ Billion 45 40 35 30 25 20 15 10 5 0 2010 2011 2012 2013 2014 2015 2016 Source: * The Future of Virtualization, Cloud Computing & Green IT Global Technologies & Markets Outlook* by Market Info Group’s new research report. (http://www.marketinfogroup.com/) Source: *Global Games Investment review 2012* by Digi - Capital 8.1 10.8 14.3 19.1 25.4 33.8 45.0 CONSOLE GAMES ONLINE GAMES MOBILE GAMES PC GAMES IN-GAME ADVERTISING Software as a Service (SaaS) Global Market is going to grow by 33.1% CAGR over 2010 - 2016 period with an aggregate $156 Billion over the same period It means the Global Software Development Market has a strong increasing trend that will be optimistic in the next 5 years. Mobile gaming is actually gaining ground in the portable game category against handled consoles, Nintendo DS & Play Station Portable. The share of revenue generated for mobile gaming has risen from a 19% in 2009 to 58% of the share in 2011. That means a growth of almost 70% each years.
36 Regional Market Game Market Revenue ($ ‘000 Mil)APEJ Business Analytics Software Market Size & Forecast (US$ Mil) US$ MillionUS$ ‘000 Mil 5000 4000 3000 2000 1000 0 100 90 80 70 60 50 40 30 20 10 0 25% 20% 15% 10% 5% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Software Revenue Annual Growth Source: IDC Semi-annual Business Analytics Software, 2H20101 NORTH AMERICA EMEA ASIA PACIFIC LATIN AMERICA Source: “Global Games Investment Review 2012” by Digi - Capital Software as a Service (SaaS) market in the Asia/Pacific excluding Japan (APEJ) region has grown by 20.1% to be worth US$2,479.1 million in 2011. Overall, the market is forecasted to grow at a 5-year CAGR of 12.3% to reach US$4,432.7 million in 2016 The video games market is going online & mobile, with Asia & Pacific is the largest part of those region markets.