This article first appeared in The Edge Malaysia Weekly on October 26, 2020 - November 1, 2020
ASIA Internet Holdings Sdn Bhd, the privately held vehicle of Wong Thean Soon or TS Wong, has been selling down its shareholding in information and communications technology company HeiTech Padu Bhd.
Last week, it was announced that Asia Internet had sold 1.89 million shares (1.87%) to trim its stake in HeiTech to 6%. A few days prior to that, the company had hived off 2.13 million shares (2.1%). To put things in perspective, it owned 10.38% of HeiTech and was its second largest shareholder at end-April.
Wong, who according to CTOS controls 99.49% of Asia Internet, is managing director and 31.81% shareholder of government e-service provider MyEG Services Bhd. Up to 21% of his shareholding in MyEG is held via Asia Internet while another 10.81% is held directly.
Apart from MyEG and HeiTech, Asia Internet also has a 26.14% stake in IT solutions provider Excel Force MSC Bhd. Wong owns 5.36% of Excel Force in his personal capacity, so his collective stake of 31.5% makes him the company’s largest shareholder.
In a brief message to The Edge, Wong says, “As announced, I am selling HeiTech and buying MyEG.” He declined to furnish further details.
Wong and Asia Internet have been trading MyEG shares but collectively, have been net buyers. In mid-May, they owned 31.03% of the government e-service provider.
Wong is a more recent shareholder of HeiTech as he only emerged as a substantial shareholder in December 2019, after Asia Internet acquired 5.45 million shares or a 5.38% stake in the company.
From early November to end-December 2019, HeiTech’s share price ranged from 75 sen to RM1.20. It has been creeping up, however, rising to as high as RM1.62 in mid-October before slipping. At last Friday’s close of RM1.26, HeiTech’s market capitalisation stood at RM127.54 million.
While it is not certain why Wong is now less bullish on HeiTech, his moves could be linked to an upcoming award of the National Integrated Immigration System (NIIS) contract, although Putrajaya has yet to announce when it will be awarded.
In August, The Edge reported that MyEG and Iris Corp Bhd were the front runners to bag the billion-ringgit NIIS government contract and that the contract was likely to be split between the two companies. Other bidders for the NIIS contract include HeiTech, Datasonic Group Bhd, Dagang Nexchange Bhd, Dataprep Holdings Bhd, Scicom (MSC) Bhd, Omesti Bhd and Kumpulan Fima Bhd.
Another company, S5 Systems Sdn Bhd, is understood to have put in several bids by partnering with various companies. MyEG has a 10% stake in S5 Systems, which is currently undertaking a reverse takeover of Ancom Logistics Bhd.
HeiTech was the developer of the existing Malaysian Immigration System (myIMMS), which was first used by the government in 1993 and which the NIIS will replace. For the six months ended June, the company registered a net profit of RM5.81 million on revenue of RM155.7 million, compared with RM1.15 million on RM139.6 million a year earlier.
Its cash and bank balances stood at RM62.46 million. On the other side of the balance sheet, its short-term borrowings were RM143.57 million while its short-term debt commitments came in at RM2.59 million.
MyEG’s share price has gained almost 43% over the past seven months. It ended trading last Friday at RM1.39 for a market value of RM5 billion.
For the six months ended June, MyEG posted a net profit of RM121.9 million on RM246.08 million in revenue. It had cash and cash equivalents of RM249.83 million, long-term borrowings of RM126.86 million and short-term debt commitments of RM43.44 million.
Interestingly, Asia Internet has been buying blocks of shares in Excel Force held by Wong as well as on the open market. It has also converted its Excel Force warrants.
Excel Force closed at 46 sen last Friday, giving the company a market capitalisation of RM283.07 million.
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