Information and communications technology (ICT) system and solutions provider SNS Network Technology Berhad is well-positioned to benefit from the digital transformation of corporate Malaysia, government agencies and educational institutions in the new post-pandemic normal. In a statement today, the company foresees rising spending of businesses, government agencies and educational institutions on upgrading IT platforms as part of their digitalisation plan to provide support for hybrid working arrangements and e-learning options.
Its Managing Director, Mr Ko Yun Hung asserted that SNS Network is set to ride on the growing demand for ICT products and services as there is no sign of a slowdown in spending from the public and private sectors to upgrade their IT system. He further elaborated that the outbreak of the Covid-19 pandemic in 2020 and 2021 had boosted the demand for ICT products and services due to movement restrictions imposed by the government.
In that sense, the pandemic has served as a catalyst for the rapid adoption and execution of digitalisation initiatives in businesses to adjust to the new normal for business sustainability. Therefore, with the increased reliance on ICT, the demand for ICT products and services is expected to remain strong moving forward.
Speaking to reporters after the company’s listing ceremony on the ACE Market of Bursa Malaysia Securities Berhad, Mr Ko said SNS Network will further expand its device-as-a-service (“DaaS”) subscription-based IT service after listing. He added that since the opening of all economic sectors, the company have seen a surge in demand for DaaS subscription-based IT service from the public and private sectors and in view of the potential growth from this segment, will further expand its DaaS subscription-based IT service offerings to more customers.
DaaS is a model for device leasing offered to customers based on monthly subscription payments. The service provides customers with the flexibility to adjust their usage according to their latest business and operational needs to avoid large capital expenditures for bulk purchases of ICT products. Since 2020 and up to 30 June 2022, SNS Network has entered into 82 DaaS subscriptions with a total subscription value of RM255.86 million and received 75 enquiries from governmental bodies and publicly listed companies.
From the above-mentioned enquiries, SNS Network has entered into contracts with 26 governmental bodies amounting to RM247.49 million and three publicly listed companies amounting to RM0.55 million.
Based on enquiries from potential customers, the SNS network will purchase ICT products such as desktops, laptops, interactive smartboards, workstations, digital signages, printers and servers to support the expansion of the service.
Under the listing exercise, SNS Network has raised RM90.72 million from its Public Issue of 362.88 million new shares at an issue price of RM0.25 per share.
The listing also includes an offer for the sale of 48.38 million existing shares to selected investors by way of a private placement. Of the total initial public offering (“IPO”) proceeds, RM33.40 million (36.9%) will be allocated for capital expenditure of which RM30.90 million will be used to expand its DaaS subscription-based IT service and RM2.50 million to set up 10 new retail stores in the Klang Valley, Johor and Penang.
A further RM18.00 million (19.8%) of the proceeds will be used to part finance the construction of the Company’s new Regional Hub in Petaling Jaya to support its nationwide expansion. The remainder of the proceeds will be used for the repayment of bank borrowings amounting to RM20.00 million (22.0%), RM13.12 million (14.5%) for general working capital, RM1.50 million (1.7%) to fund the marketing activities for JOI while the remaining RM4.70 million (5.1%) to defray the estimated listing expenses.
Based on the enlarged share capital of 1.61 billion shares, the total market capitalisation of SNS Network upon its listing would be RM403.19 million. M & A Securities Sdn Bhd is the Adviser, Sponsor, Underwriter and Placement Agent for the IPO exercise.
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