This article first appeared in Wealth, The Edge Malaysia Weekly on January 22, 2024 - January 28, 2024

Born into a poor family in Port Klang, Selangor, Choo Chin Peng would never have become a computer expert and co-founded ACE Market-listed Autocount Dotcom Bhd with Choo Yan Tiee in the 1990s if it were not for his father’s investments in the stock market.

This is why Chin Peng, the executive director and chairman of Autocount, has told his children: “Whether you study well or not at school, you need to know how to invest, learn about shares, bonds, unit trust funds. At least pick up the fundamentals.”

Chin Peng and his younger brother had relied on scholarships to complete their secondary school education while their father did odd jobs to provide for the family. Their mother was a housewife who worked at a factory when times were tough.

Until today, Chin Peng remembers vividly the day his father brought home a personal computer (PC) when he was still studying in secondary school in 1987. It had cost about RM3,000, which was extremely expensive even for a middle-class family.

How could his father afford it? Chin Peng found out that the money had come from the stock market. His father bought the shares of a company during its initial public offering (IPO) and sold them for a profit. It was a speculative trade, but a good one.

“I always thought it was Telekom Malaysia (known as Syarikat Telekom Malaysia back then) but my dad said it wasn’t. He can’t remember which company exactly. Nonetheless, he made a few thousand ringgit, which gave me the chance to dabble in the world of computers,” he recalls.

Chin Peng, who was already showing his talent in mathematics by winning several national awards, started falling in love with computer programming from there on. He would follow his father to the Subang Parade mall in Selangor during the weekends to look at programming books at the bookshops, standing there for hours to memorise the codes and trying them out after he got home. Those imported books, priced at over a hundred ringgit each, were, again, not affordable to him. 

Unsurprisingly, he would later become a top student and the holder of a master’s degree in computer science and information engineering from the National Chiao Tung University in Taiwan.

Despite his success, Chin Peng says he has always led a rather simple life, which he attributes partly to his past experience of living in poverty. He continues to spend cautiously.

Yan Tiee, co-founder and CEO of Autocount, has known Chin Peng for four decades since secondary school and worked closely with him for more than 20 years. 

Both of them graduated from Hin Hua High School, a Chinese independent school in Klang, and studied in a university in Taiwan. But they come from different backgrounds with different ways of perceiving wealth.

While Chin Peng is more frugal, Yan Tiee enjoys the finer things in life. He spends money on branded watches or cars, and likes hosting dinners.

Yan Tiee wasn’t born rich, but he came from a relatively well-to-do family. His father had a successful business in logging and sawmilling. That was how Yan Tiee was exposed to business at a fairly young age.

While Chin Peng is introverted, smart and relatively quiet, Yan Tiee is loud, witty and sociable — a good companion for dinner or a beer. He enjoys talking and telling stories.

“We are really the polar opposite in terms of character,” says Yan Tiee during the interview with Wealth.   

Naturally, they make a good team when running a business. While Chin Peng, the math geek, spends much of his time in front of his PC developing the company’s accounting software, Yan Tiee is the business and money man in charge of funding, sales and business development. He meets potential clients, builds relationships and generates sales.

Their success can be seen in the listing of Autocount on the ACE Market on May 9 last year. The counter closed at 67 sen on Jan 12 this year, giving the company a market capitalisation of RM369 million.

When it comes to their personal investments, Chin Peng and Yan Tiee place emphasis on risk-adjusted returns and prefer to hold real assets. They see themselves as “old school” investors as they have gone through several crises, including the dotcom bubble, Asian financial crisis and global financial crisis.

A way to protect themselves from the wild swings in the market is to hold real assets. It is no surprise that a huge chunk of their personal investment portfolios consist of properties. Their key strategy is to buy properties located at prime locations at a good valuation. These are typically properties that come with foreign demand that could push the prices up.     

The two are also cognisant of the importance of diversification. They do not bet all their wealth on Autocount’s shares. For instance, Chin Peng invests his personal wealth in stocks, bonds and unit trust funds to spread the risk.

He has dabbled in cryptocurrencies too, given his background as a computer expert. But his involvement in this asset class is mainly due to its risk-reward metric. “I can afford to lose it all, but I also have the chance to earn a lot. That depends on your preference,” he says.

Yan Tiee does not touch cryptocurrencies. Not because he is afraid of volatility; rather, he is worried that he would fall in love with it too much. As much as he is prudent, he can be quite aggressive in deploying funds sometimes. He knows that, and the more conservative Chin Peng provides a good balance for his risk-taking side.

Every entrepreneur walks a different path. The one trodden by Chin Peng and Yan Tiee has been far from easy. They spent about RM1 million in a year — funded by Yan Tiee’s father — in their first business venture of manufacturing and selling electronic dictionaries in the mid-1990s.

It wasn’t because of the expenses. Yan Tiee, Chin Peng and the latter’s younger sister took home a salary of RM4,500 in total each month. They also paid RM1,800 per month for the block of building they were renting, but leased out the ground floor at RM2,500. It was a shrewd move by Yan Tiee.  

However, they spent a huge sum of money on the mould of the electronic dictionary and on a top-notch translator of the English and Malay languages whom they had hired for the product to ensure its quality. When it didn’t sell, they had to give it up. 

When deciding what they would do next, Yan Tiee recalled his experience of working at his father’s company and came up with an idea.

Upon returning from Taiwan, Yan Tiee was his father’s personal driver for some time, driving him around to collect payments from clients. He also had to help out the accountant, a task Yan Tiee did not like but took seriously nevertheless.

Yan Tiee’s job was to record and compile all the transactions and payments made between the company and each of its clients. 

“We had several hundred customers with all the transactions recorded manually. Have you seen the huge, green accounting book or ledger that spreads across the table when opened?

“In it, there are records of customer A, customer B and so on. How much each of them had paid and how much was unpaid. We produce a so-called ‘statement’ for them each month. My father would then collect money from them with those ‘statements’.”

Yan Tiee observed the process, which he found to be inefficient. Near the end of each month, when the “statements” had to be produced, the accountant would be on the phone for hours a day. 

Why? It did not take long for Yan Tiee to find out that she was tallying the company’s record with that of each client line by line. It was only normal as over a hundred transactions were made between the two parties.

“I thought, ‘Why not buy a fax machine?’ It would have saved so much time. I suggested it to my dad, but was scolded. At about RM4,000 for one in 1991, he said that’s not for a small outfit like ours!”

Yet, Yan Tiee was stubborn and rebellious enough to purchase one for the company. Fortunately, his father quickly realised its benefit and was eventually happy with his son’s decision.

With the initial success, Yan Tiee managed to convince his father to buy an accounting software with only the account receivable module at about RM4,000 to further simplify the company’s accounting processes.

“Those was all the pain points I had gone through in the accounting department. That was in 1991 and 1992. I thought, ‘Why couldn’t we come up with a better product in the market?’”

Like many other entrepreneurs, Chin Peng and Yan Tiee started off their next business venture by imitating the product of the market leader. It was mainly a two-man show where one would develop the software while the other would sell it.

They believed their accounting software was good, but business remained challenging as they were the new kid on the block. Accounting software relies quite heavily on dealers to be sold, but none of them was willing to push Autocount’s product to the market as it had no track record.

After two years of hard work and bootstrapping, Chin Peng told Yan Tiee that they should probably close the business.

“It was in 1999 and we were struggling. We were 28 years old and the business was very uncertain. We blamed each other. He blamed me for not selling the product well. I blamed him for developing a bad product,” recalls Yan Tiee.

Still, they resolved their issues, hunkered down and decided to hold on a little longer. Chin Peng was so desperate back then that he followed the advice of a feng shui master, bought an aquarium with a fish and placed it in a corner of his office.

“You know, when you’re desperate, you want to believe in anything that can help you,” says Chin Peng.

The next day, an accounting software dealer, whom Yan Tiee had befriended, called to introduce them to a potential client in Singapore. They were elated.

The duo met the client in Kuala Lumpur and sealed a deal worth RM35,000 to sell their accounting software as a white-label product (a product that is made by one company but packaged and sold by another company under the latter’s brand name) to the Singaporean company. With that, Autocount was profitable for the first time since it was launched. Chin Peng was grateful to the fish, and to his partner most of all.

The biggest challenge came in 2000 when a business partner decided to set up his own accounting firm and compete head-on with Autocount. While it is water under the bridge, Yan Tiee says the company faced an existential crisis when that person poached several key employees at Autocount.

“He was competing fiercely with us at a time when our business had just started to take off. He knew us very well, including all the weaknesses of our existing products. He developed a better one and many of our dealers joined him. We were barely surviving,” says Yan Tiee.  

Chin Peng was also worried. “Honestly, I was very scared. We didn’t know if there were spies among our employees. Who would quit and join them? Some of our programmers were poached by them later on.”

Pushed against the wall, the duo made the critical decision to build Autocount’s accounting software from scratch with another programming language. With that, they could make it better while ensuring their new competitor did not have an advantage over them.

The firm survived with some customised solutions during that period and finally launched its new product in 2006. “The product has been upgraded many times until today. Over the years, it has earned the firm more than RM100 million. Needless to say, it is also thanks to the contribution of our employees and dealers,” says Chin Peng.

Autocount’s biggest breakthrough was during the implementation of the goods and services tax (GST) in 2015. As small and medium enterprises (SMEs) rushed to comply with the new tax regime, Autocount’s annual revenue hit about RM30 million that year as compared to just about RM6 million in 2013.

Business took a hit when the GST was abolished in 2018 and replaced with the sales and services tax (SST). But it has continued to grow steadily over the years and Autocount has become a well-known brand within the business community.

Despite the Covid-19 pandemic, the company recorded a slightly higher revenue and better profit in 2020 compared to a year earlier.

In its financial year 2022 (FY2022), Autocount recorded revenue of RM38.72 million and profit after tax of RM13.84 million, according to its prospectus dated April 14, 2023.

In the third quarter of its financial year 2023 (3QFY2023), the company recorded revenue of RM28.97 million and profit after tax of RM9.38 million.  

Chin Peng and Yan Tiee are optimistic about the company’s prospects this year. Autocount raised RM31 million from its IPO to expand its business overseas, but its focus this year will be on the local market as the government is looking to implement e-invoicing.

What this means is that businesses with an annual revenue above a certain threshold will need to upload their e-invoices to the Inland Revenue Board’s official portal. The e-invoices have to be uploaded within 72 hours after they are issued.

“Many SMEs had not needed accounting software. Depending on the threshold, many might need one for e-invoicing, moving forward,” says Chin Peng.

Yan Tiee observes that e-invoicing will have a huge impact on the SME market. “Around 400,000 firms were affected when GST was implemented. That was about half of the 1.1 million local SMEs in total during that time.”

He adds that according to the Companies Commission of Malaysia (SSM), the number increased to 1.5 million as at the end of last year.

“The total number of business entities as at last year, including all the e-commerce platform businesses, was 8.8 million. The threshold for e-invoicing isn’t out yet, but it will likely involve more businesses than the GST,” says Yan Tiee.

The duo also expects e-invoicing to build traction for Autocount’s cloud accounting software business, which generates recurring income.

According to Yan Tiee, about 20% of the company’s revenue is recurring income generated by its software maintenance and cloud solutions.  About 4% of total revenue comes from software maintenance and 16% from cloud.

The remaining 80% of its revenue comes from on-premise accounting, point-of-sales (POS) and payroll software that are sold one-off to businesses, largely through its authorised dealers.

It is the duo’s hope that more SMEs will subscribe to the company’s cloud solution for simple accounting matters, such as e-invoicing, by paying roughly just RM100 per month. They do not need the on-premise software that comes with more complicated and customised functions at a higher price point.  

“They can save a lot of time by subscribing to our cloud solution. The amount isn’t big. It would be like you paying for your utility bills every month,” says Chin Peng.

As for its overseas business, Singapore remains Autocount’s largest revenue generator, contributing about 20% to its overall revenue. Its business in the Philippines is close to being deployed while that in Thailand will soon welcome its country manager. In Indonesia, the company is registered and now working with a few software dealers.

“We aren’t starting in Vietnam yet as we don’t want to spread our resources too thin,” says Yan Tiee.

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