New shareholders spice up EForce

by **Cals** Mon 30 May 2016, 02:46

New shareholders spice up EForce

BY S. PUSPADEVI

THE entry of low-profile entrepreneur Wong Thean Soon or T.S. Wong (pic) into Excel Force MSC Bhd (EForce) has stirred interest in this ACE Market company that provides application solutions for the stockbroking and banking industry.
Wong entered EForce via his controlling vehicle Asia Internet Holdings Sdn Bhd that announced that it had acquired 18.7% on April 26. According to reports the seller was linked to the managing director of the company Wang Kuen-Chung alias Jeff Wang.
As the co-founder, managing director and single largest shareholder of MyEG Services Bhd, Wong’s effective stake is 42%.
MyEG is a concessionaire for the Malaysian Electronic-Government MSC flagship application. It builds, operates and owns the electronic channel to deliver services from various government agencies to Malaysian citizens and businesses.

Wong spearheaded the firm’s transfer from the ACE Market to the Main Market and in the process saw through a significant rise in the company’s profits by increasing its products and services.
As a result, MyEG has been one of the top stock market performers in recent times, which possibly explains the exuberance surrounding the entry of Wong into EForce.
Since Wong’s entry into EForce, the stock has almost doubled.
And as a result, EForce’s shares now trade at a lofty price earnings multiple of 47.41 times, which interestingly, is at the same high level that MyEG’s shares trade at, ie, 47.62 times.
Another development at EForce has been the entry of notable investor Brahmal Vasudevan, who had begun acquiring EForce shares since May 13. He now owns 12.05 million shares or a 6.77% stake, which is worth about RM216.4mil.
Now what is interesting about Brahmal’s entry into EForce is the fact that he had made a hugely profitable investment in MyEG in the past.
Recall that Brahmal, who also runs private equity firm Creador Sdn Bhd, had bought into MyEG back in 2012 in his personal capacity, and had reportedly exited the investment with a hefty return.
Wong declined to comment for this article, but speculation is rife that he has set his sights on growing this company. He may even emerge as a director of the company, sources say.
As one insider puts it, “The plan is likely to expand EForce’s product line to cover other industries such as insurance and also leverage on MyEG’s network.”
Another source adds that EForce is in a good position to grow into the insurance sector, given the upcoming liberalisation of tariffs. “Systems will be upgraded and that’s where EForce can play a role.”
Wang and his wife Sharon Sun founded EForce, formerly known as Excel Force Sdn Bhd, in 1994 to venture into the development and marketing of stockbroking information systems and application software.
Wang, 59, a Bachelor of Commerce graduate, restructured EForce’s business and assets and listed the firm on the Main Market of Bursa Malaysia in December 2004.
The second-largest shareholder in EForce is Exacta Co Ltd, where Wang and his wife Sun have a deemed interest of 12.90%.
EForce’s third-largest shareholder is Datuk Mohamed Nizam Abdul Razak, who holds a 8.13% stake.
Noteworthy is that Mohamed Nizam has been disposing a 1.36 million block of shares via the open market between May 10 and May 19 this year.
Prior to Asia Internet’s entry, the CEO of PDX.com Sdn Bhd Datuk Jayakumar Panneer Selvam had been gradually buying shares in EForce since Feb 10, 2016 via open-market transactions. And up till April 26, 2016, his direct interest in EForce stood at 7.14% or 14.76 million shares.
For the financial year 2015 (FY15), the firm’s net profit fell 14.4% to RM7.57mil against a higher revenue of RM25.28mil from RM21.87mil in FY14.
Basic earnings per share dropped to 3.65 sen in FY15 from 4.17 sen a year ago. The profit and revenue for FY13 stood at RM6.96mil and RM20.63mil, respectively.
For FY15, its application services segment contributed 62% to group revenue, followed by application solutions with 30% and maintenance services with 8%.
EForce has been consistent in its dividend payout. In a tough economic environment, the company increased its payout ratio to 82% in FY15 from 60% in FY14.
Wang declined to comment on the company’s outlook and performance when prompted via email.

In terms of property. EForce owns two properties in Petaling Jaya and these include the 2,583-sq-ft office unit in Phileo Damansara II in Jalan Damansara, and its 18,988-sq-ft headquarters at Plaza 33 in Jalan Kemajuan. The combined net book value of the properties was RM14.57mil as at Dec 31, 2015.