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Going For Listing: Asdion Bullish On China's Prospect


By Siow Chen Ming

10 Jan 2005 - Asdion Bhd will be one of the latest in a long list of software developers already listed on the Mesdaq Market.

The company was founded in 1993 when current chief operating officer Yap Tai Tee, an electrical engineer by training, set up a business in the marketing and distribution of software products for the hospitality industry.

Two years later, it moved into software development, expanding its scope of business in the sector. Today, it has grown from the hospitality industry to providing software solutions in areas of management and accounting for small and medium enterprises (SMEs).

Asdion's main software, Asdion AccLink, integrates traditional accounting systems with various front-end business operations to achieve complete front- and back-office solutions. AccLink and Asdion's other products were developed to capture the growing SME market in the country, which is eager to move from conventional back-office management to a computerised system.

The company reported a record net profit of RM801,000 for the financial year ended Dec 31, 2003, which was higher than FY2002's net profit of RM628,000. However, its interim net profit for the period until June 30, 2004, of RM269,000, its latest results made available to the public, may reflect a lower full-year net profit on an annualised basis.

Nevertheless, Yap recently said that Asdion is on target to surpass its FY2003 net profit.

Asdion's issue price of 50 sen is 25 times its FY2003 earnings per share of 0.2 sen based on the 40 million outstanding shares post initial public offering.

While the valuation is deemed high compared with the market price-earnings ratio of around 15 times, the company's adviser says Asdion has attractive growth potential. It plans to focus on the growing SME software market in Malaysia, Singapore and China over the next few years.

The management is particularly bullish on China's prospects pending the Olympic Games in 2008, which is expected to spur demand for software products in the hospitality sector. To expand its presence in China, Asdion has set up an office in Shanghai and has plans for a marketing office in Beijing by the second half of this year.

The company has raised RM6 million from the public issue and together with a rights issue, the total proceeds will be RM7.38 million.

Asdion is allocating RM1.2 million for capital expenditure, RM2.2 million for research and development, RM2.75 million for business expansion and the remaining RM1.2 million to pay for listing expenses.

The company will still carry in its balance sheet total long-term liabilities of RM577,314 post the listing exercise.

Source: theedgedaily.com/cms/content.jsp?id=com.tms.cms.