KUALA LUMPUR (Feb 17): RichTech Digital Bhd (KL:RTECH) said on Monday it is prioritising business expansion, setting aside plans for regular dividend payments to investors for now, following its strong trading debut on the ACE Market.
The company, which mainly provides electronic reloads and bill payment services, has no immediate plans for a dividend policy, managing director Lee Teik Keong told reporters after RichTech’s listing ceremony. The current focus is on expanding its operations and increasing its market share, he said.
“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.”
RichTech tripled its share price at the trading bell after its initial public offering (IPO) raised RM20 million as investors scrambled for a slice of the action. Demand from individual retail investors overwhelmed the number of shares available by more than 245 times during the IPO launch.
Established in 2011, RichTech distributes electronic reloads for mobile airtime and data via an SMS reload system and web portal onlinereload.net, presently known as the SRS Portal. The company expanded its service to include payment of utility bills, quit rent and assessment, and game credits.
New market segments
The planned expansion into East Malaysia will allow the company to reach new customer segments and underserved regions, taking advantage of the increasing demand for digital payment solutions, said RichTech’s chairman Wong Koon Wai at the same news conference.
The company claimed that it now has some 32,000 end-users and a network of more than 1,000 corporate accounts that provide access to over four million users.
The public issue raised gross proceeds of RM13.67 million, of which RM4.5 million has been earmarked for marketing, promotional and collaboration activities to grow the user base of its SRS App and SRS Portal.
RichTech 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.
The rest will fund working capital requirements, including stocking up on electronic reloads that account for over 70% of its annual purchases, as well as cover estimated listing expenses.