KUALA LUMPUR (Jan 21): RichTech Digital Bhd, en route to the ACE Market, said on Tuesday that the company is eyeing an expansion into rural areas to grow its customer base on its digital apps.
The plan involves targeted activities, including promotions and advertisements on the Google search engine and other platforms, as well as strategic partnerships, managing director Lee Teik Keong said at a press conference following the launch of the company’s initial public offering (IPO) prospectus.
"We are specifically focusing on rural areas, where there is a lack of service from other operators,” he said. “This remains a key area of interest for us.”
RichTech, which distributes electronic reloads and provides bill payment services, is seeking to raise up to RM20 million from the IPO.
The company has earmarked 30% or RM4.5 million of the gross proceeds from its public issue for marketing, promotional and collaboration activities aimed at growing the user base on its digital apps, SRS App and SRS Portal.
RichTech also plans to spend RM3 million to acquire a new office to consolidate its headquarters and branch office under one roof, with an estimated built-up area of up to 6,000 square feet.
Founded in 2011, RichTech began as a provider of electronic reloads for mobile airtime and data via an SMS-based reload system and a web portal, onlinereload.net — now known as the SRS Portal. Its services have since expanded to include utility bill payments, quit rent and assessment payments, and game credit top-ups.
RichTech mainly earns revenue by acting as an intermediary for its electronic reload services, with revenue being incentive- or commission-based.
For incentive-based revenue, a full payment amount is deducted from the company’s credit pool, and incentives are provided at the end of the billing cycle. For commission-based revenue, part of the payment is deducted upfront with the remainder deducted from the company’s credit pool.
The business-to-business segment — including reload retailers, mobile phone shops and third-party mobile applications that utilise its SRS services — makes up nearly all of its revenue.
"We are aligning our efforts with budgeting for activities to support this expansion," Lee said. The business-to-customer segment, "in particular, is a market we are eager to grow," he added.
For the financial year ended Dec 31, 2024 (FY2024), RichTech reported a profit after tax of RM5.37 million, a 27% increase from FY2023, while revenue increased at the same pace to RM7.80 million.
RichTech's IPO, priced at 25 sen per share, would give the company a market capitalisation of RM50.61 million upon listing. This values the company at six times the earnings in its financial year ended Dec 31, 2023.
The IPO application opens on Tuesday and closes on Jan 31, with the company set to be listed on the ACE Market on Feb 17.
KAF Investment Bank is acting as the IPO’s principal adviser, sponsor, underwriter and placement agent.