Datasonic Group

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Datasonic gets one year extension to supply 6.1m MyKad

KUALA LUMPUR: Datasonic Group Bhd has secured a one-year extension from the government to supply 6.1 million MyKad raw cards and MyKad consumables.

It announced on Thursday its unit had received a letter of extension from the National Registration Department (NRD) for the period from Jan 1 to Dec 31,2020.

To recap, on May 10,2016 it had received a contract to supply 12 million MyKad raw cards and MyKad consumables for three years and six months, starting from July 1,206 to Dec 31,2019.

“Due to much better quality of the new MyKad raw cards and chips, there were much lower replacement of faulty chips and peel-off of MyKad cards.

“As a result, during the contract period of 3½ years, NRD only ordered 5.9 million (49.17%) of the 12 million units of MyKad raw cards with huge savings to the government, ” it said.

Under the terms of the letter of extension, there will be no change to the value of items, quantity and value of the contract.

Datasonic said the contract was expected to contribute positively towards the future earnings and net assets per share of the group for the financial year ending March 31,2020 and the financial year thereafter for the duration of the contract.

Source: The Star

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Datasonic accepts revised letter to supply 11m passport chips

KUALA LUMPUR: Datasonic Group Bhd has accepted a revised letter from the government to supply 11 million passport chips and provide maintenance services while total contract sum was unchanged at RM318.75mil.

It said on Friday its unit Datasonic Technologies Sdn Bhd had accepted the letter of change and scope dated Jan 23 from the Home Ministry.

Under the revision, the total quantity of passport chips to be supplied would be reduced from 12.5 million chips to 11 million chips, amounting to RM280.50mil.

There was also a new scope of works for the maintenance services for hardware and software of autogate and chips and the maintenance services for equipment and application of public key infrastructure and public key directory, amounting to RM38.25mil.

To recap, Datasonic had announced on Dec 15,2015 its contract to supply the passport chips for five years or 12.5 million chips, starting from Dec 1,2016 to Nov 30,2021 for RM318.75mil.

“The contract has been contributing positively towards the earnings and net assets per share of Datasonic Group since the commencement of the contract on Dec 1,2016 and the financial years thereafter.

“The new scope of works is expected to contribute positively towards the future earnings and net assets per share of Datasonic Group for the financial year ending March 31,2020 and the financial years thereafter for the duration of the contract, ” it said.

Source: The Star

https://www.thestar.com.my/business/bus ... port-chips

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RHB maintains 'buy' on Datasonic, TP at RM1.96

KUALA LUMPUR: Datasonic Group Bhd's new arrangement with the government is a win-win solution for both parties as it will recalibrate the quantity of chip supply while leaving the total contract sum unchanged, says RHB research.

To recap, Datasonic received additional scope of work under the existing Malaysian passport chip supply contract from the Home Ministry.

Under the contract, the group will undertake maintenance services for the hardware and software of auto gate and chips, equipment and applicaiton of public key infrastructure and public key directory at a value of RM38.25mil.

Meanwhile, the the quantity of passport chips will be reduced from 12.5 million to 11 million amounting to RM280.5mil, which will leave the total contract sum unchanged at RM318.75mil.

"Instead of going through a long process and commit to an additional contract to these works, the Government is able to generate savings by recalibrating the quantity of chip supply based on the current burn rate of c.2m pa and outstanding quantity of c.6.3m units.

"On the other hand, this will contribute positively to the earnings of Datasonic with an additional revenue of MYR15m pa," said RHB.

It added that the company is able to recognise unbilled revenue retrospectively from May 2019, in which most of the costs have been expensed.

The research house said its forecasts are unchanged as the additional scope of work is within its expectations.

It maintained a buy call on the stock with a target price of RM1.96.

Moving forward, RHB believes the higher barrier of entry on solutions related to national security will give Datasonic a good chance of clinching a new contract to supply auto gate solutions at Bangunan Sultan Iskandar in Johor.

Following that, the Foreign Visa System is expected in February while the National Integrated Immigration System will close its tender period on March 4.

Source: The Star

https://www.thestar.com.my/business/bus ... p-at-rm196

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Datasonic bags Malaysia-Singapore entry point e-gate contract

by Tan Xue Ying

KUALA LUMPUR (Feb 3): Datasonic Group Bhd has been awarded a facial recognition e-gate supply contract worth RM6.97 million by the Home Affairs Ministry.

The group said the contract is for the supply of the equipment, software and application for 16 units of foreigner e-gate with facial recognition system at the Malaysia-Singapore entry and exit point to the Immigration Department.

In a filing with Bursa Malaysia, Datasonic said it won the one-year contact, which starts on Feb 15, through an open tender participated by 18 companies last October.

The group said it is required to furnish a performance bond amounting to RM348,656 to the ministry for a two-year period ending on Feb 14, 2022.

Datasonic expects the contract to contribute positively towards its future earnings and net assets per share for the financial year ending March 31, 2020 (FY20) and thereafter, for the duration of the contract.

Shares of Datasonic closed two sen lower at RM1.44 today for a market capitalisation of RM1.94 billion, after 21.56 million shares exchanged hands.

Source: The Edge

https://www.theedgemarkets.com/article/ ... e-contract

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Datasonic secured passport chip contract despite unsatisfactory record, court told

by Timothy Achariam

KUALA LUMPUR (Feb 12): Datasonic Group Bhd’s subsidiary, Datasonic Technologies Sdn Bhd (DTSB), managed to secure an RM318.75 million passport chip contract in 2015 from the Ministry of Home Affairs (MoHA) via direct negotiation, despite having an unsatisfactory track record, the High Court was told today.

This was revealed by Dr Uzailee Abdul Latiff, a former Finance Ministry deputy secretary-general who was in charge of procurement at the time, who was testifying in the graft trial of former Home Affairs Minister Datuk Seri Dr Ahmad Zahid Hamidi.

The prosecution witness said DTSB had sought a direct negotiation of the contract that involved the supply of 12.5 million polycarbonate biodata pages with passport chips via a letter dated May 26, 2014, that was addressed to then Finance Minister Datuk Seri Najib Abdul Razak, who was also the Prime Minister at the time.

Najib, said Uzailee who was reading out his witness statement, had received the letter and made a note on it though Uzailee did not say what the note was about. Subsequently, Uzailee said he wrote to MoHA to seek its input on DTSB, as per MoH protocol.

But in MoHA’s reply, which was received in August 2014, the Ministry said DTSB’s previous performance had been unsatisfactory as there had been frequent delays in the supply of the polycarbonate pages, which had affected the performance of the Immigration Department, Uzailee said.

The Ministry also said it had no intention of nominating DTSB for future procurements.

Instead, it said it would maintain its existing contract with Percetakan Keselamatan Nasional Sdn Bhd for the printing of the passports and keep IRIS Corp Bhd for the supply of chips due to their “exemplary performance”.

However, MoF and MoHA officials had a discussion with DTSB three months later in November, during which DTSB said it could save the Government RM103.49 million if it was awarded the project, Uzailee said.

On hearing that, the MoF wanted “to evaluate DTSB’s systems and whether its passport chips adhered to international standards,” he said.

But DTSB subsequently negotiated the contract directly with MoHA and was eventually awarded the job. The deal was for five years.

The award was against protocol, Dr Uzailee said, as MoHA should have obtained the approval of the MoF first. And direct negotiations are only allowed in contracts that involved national security.

However, when questioned by Zahid’s lawyer Datuk Ahmad Zaidi Zainal about the Government’s policy on direct negotiations, Uzailee said: “Yes, the passport is one of the documents that have national security implications.”

Earlier yesterday, Datasonic chairman Tan Sri Mohamed Hashim Mohd Ali admitted that he had signed letters in 2014 that were addressed to Najib and Zahid, in which the company had expresed its intent to be the supplier of the polycarbonate pages with passport chips.

Hashim also told the court that there was a shortage of passport chips in mid-2016, which had resulted in Datasonic having to delay its shipment to the Immigration Department. Subsequently, MoHA issued a warning letter to the company.

“I replied [to the letter] and pledged that we were committed to supply [the] chips,” he said.

Hashim also said Datasonic had issued a statement denying it had paid Zahid kickbacks after he read a report by The Edge linking DTSB to Zahid’s graft charges in 2018. “We did not pay him, none of the company directors did,” he told the court today.

Ahmad Zahid, who is also the Member of Parliament for Bagan Datuk, is facing 47 charges — 12 for criminal breach of trust, eight for bribery and 27 for money laundering — involving millions of ringgit belonging to Yayasan Akalbudi.

Datasonic and DTSB were both implicated in some of the charges against Ahmad Zahid, which accused the former Deputy Prime Minister of having received two cheques totalling RM6 million from a Datasonic director for the contract.

Source: The Edge

https://www.theedgemarkets.com/article/ ... court-told

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Datasonic Q3 net profit jumps 124% y-o-y, cautiously optimistic over outlook

KUALA LUMPUR: Off the back of strong third-quarter earnings results, Datasonic Group Bhd says it has a positive outlook on its current financial year ending March 31,2020.

"With the order book of RM611mil, along with the on-going supply of passport chips and MyKad orders, and the additional scope of work and projects for the supply and maintenance services for auto gates nationwide and Malaysia-Singapore border, our business outlook is good,” said Datasonic chairman Tan Sri Mohamed Hashim Mohd Ali.

For the recently concluded quarter, Datasonic's net profit jumped 124.3% to RM20.18mil as compared to RM9mil in the previous corresponding quarter.

This was on the back of 32.1% higher revenue of RM74.97mil versus the comparative quarter.

"The strong results were largely driven by higher supplies of national ID and consumables, passports and provision of personalisation services," said the company.

It declared a third interim single tier tax-exempt dividend of one sen per share.

For the nine-month period to Dec 31, 2019, the group recorded a cumulative net profit of RM48.05mil, which was 92.6% higher than the sum of RM24.91mil posted in the previous corresponding period.

Earlier this year, Datasonic won an open tender for the supply of equipment, software and application for 16 units of foreigner e-gate with facial recognition system to the Immigration Department.

As at 12.30pm, Datasonic's share price rebounded 14 sen to RM1.18. This comes after the share lost 25.71% in Wednesday trading, which resulted in an unusual market activity query from Bursa Malaysia.

Source: The Star

https://www.thestar.com.my/business/bus ... er-outlook

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Datasonic MD says firm’s ability to secure govt passport chip contract based on merit


By INTAN FARHANA ZAINUL

Datasonic MD Chew Ben Ben said that there has been a misleading perception as to how the company had secured its passport contract.

PETALING JAYA: Datasonic Group Bhd deputy managing director Chew Ben Ben has clarified that the company’s ability to secure its contract to supply passport chips to the government was based on merit.

He said there has been a misleading perception as to how the company had secured its passport contract valued at RM318.75mil in December 2015, after a report emerged in 2014 about how the company had underperformed in its prior contract of supplying polycarbonate data pages.

Datasonic and subsidiary Datasonic Technologies Sdn Bhd (DTSB) are currently implicated in the criminal charges against former deputy prime minister Datuk Seri Ahmad Zahid Hamidi.

In one of the charges, the former deputy prime minister is accused of receiving a RM5mil cheque from a Datasonic director.

Ahmad Zahid is facing 47 charges – 12 for criminal breach of trust, eight for corruption and 27 for money laundering – in funds belonging to Yayasan Akalbudi.

Chew explained that before 2015, there were three vendors involved in making the Malaysian passport documents, including the printing of the passport book and chips to store data and the polycarbonate data page.

Chew is clarifying following news that DTSB managed to resupply chips for the Malaysian passports despite having an underperformance report.

On Dec 15,2015, Datasonic bagged a contract to supply Malaysian passport chips for a period of five years or 12.5 million passport chips commencing from Dec 1,2016, to Nov 30,2021, for a contract sum of RM318.75mil.Chew said the new 2015 contract had made Datasonic the sole vendor to supply Malaysian Passports.

“In August 2014, there was a report by the Home Ministry sent to the Finance Ministry regarding unsatisfactory performance on the part of Datasonic, ” he said.

Chew said that the alleged shortage in passports was in fact caused by another vendor.

He pointed out that as of September 2014, Datasonic has supplied a total of 4.61 million units of polycarbonate data page without the chip to the Malaysian Immigration Department against the actual demand of 3.5 million passports.

He said that for the 2015 contract, Datasonic had to go through an extensive discussion with the government before it won the project.

“Datasonic were then called in on Sept 22,2014 by the Home Ministry to discuss the company’s proposal to include passport chips into our polycarbonate data page, ” he said.

Prior to the 2015 contract, Chew said passport chips were embedded at the back-cover of paper-based passport booklet by the previous vendor.

“Our proposal to the government that time was to include the chip in our the polycarbonate data page and it was the latest technology mainly used by many developed countries, which is more secure.

“By consolidating the process, he had also helped the government to save about RM75mil, ” he said.

In November 2014, Datasonic was called in by the Finance Ministry together with the immigration department and Home Ministry to discuss Datasonic’s proposal.

“In April 2015, Datasonic had passed all the various tests and after fulfilling all the procurement processes, the Ministry of Finance had decided to approve the contract for the supply of passport chips to Datasonic based on direct negotiation, ” Chew said.

Source: The Star

https://www.thestar.com.my/business/bus ... d-on-merit

[winston]

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Datasonic rises 8.51%; RHB Research says steep correction in share price overdone

by Arjuna Chandran Shankar

KUALA LUMPUR (March 11): Shares in Datasonic Group Bhd rose by as much as 8.51% in active trade this morning.

It saw some 30.86 million shares changing hands on the local bourse today, exceeding its 200-day average trading volume of 12.67 million by over two times.

This rise is a sharp contrast to its trading activity during the morning trading session yesterday, where it plunged to 69 sen in mid-morning trade. That said, the stock rebounded to close unchanged at 94 sen yesterday.

In a note to investors today, RHB Research said the upheaval in the local political environment contributed to a 40% correction in its share price, which also saw some short-selling activities.

“Unsurprisingly, the risk-off sentiment is profound following the wider spread of Covid-19, oil price slump, and domestic political changes.

"However, we believe the steep correction is overdone, given Datasonic’s strong business fundamentals, which are backed by a total outstanding orderbook of RM611 million and sustainable strong earnings,” the research house said.

RHB Research also opined that Datasonic’s fourth quarter ended March 31, 2020 (4QFY20) is expected to yield strong results, particularly as it recognises profits from auto-gate maintenance related works.

It further cited that Datasonic’s core earnings for 3QFY20 were the best in its recent history, rising 71.5% year-on-year and 46.9% quarter-on-quarter on the back improved revenue following stronger MyKad orders and higher revenue from security and surveillance, maintenance, and Europay, MasterCard and Visa-card related solutions.

In terms of contracts, the group is one of 15 bidders for the approximately RM1.5 billion National Integrated Immigration Systems (NISS) contract, for which tender submissions closed on March 4, 2020.

Meanwhile, Datasonic is also bidding for the foreign visa contract (VLN) from the Home Ministry. The VLN is potentially worth between RM1 billion and RM1.5 billion, and bidding for the contract will close on April 16, 2020

“We expect the roll-out of these contracts sometime in April or May. We believe Datasonic is among the frontrunners for these bids, given its track record as a reliable integrated service provider for KDN in national security-related solutions since 1998,” the research house opined.

RHB Research added that as far as core competencies are concerned, Datasonic is currently involved in the four main modules for immigration systems in terms of passports and auto-gate related border controls, while also having experience in visa, pass and permit modules.

All in all, the research house is still maintaining its “buy” call and a RM1.96 target price (TP) on Datasonic. This TP is based on a 39 times forecasted financial year ending March 31, 2021 (FY21) price to earnings (PE) ratio.

This PE ratio implies a 0.5 times probability of a RM1.44 per share hypothetical value from the VLN contract.

“We maintain our call too, given Datasonic’s sustainable strong results, potential job wins in the near term, and undisputed track record in securing contracts and delivering outstanding service — irrespective of the government of day,” RHB Research opined.

However, should Datasonic fail to clinch the VLN and NISS contracts, its TP may revert to RM1.21.

Source: The Edge

https://www.theedgemarkets.com/article/ ... e-overdone

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Datasonic rises in heavy trade on hopes of government contract wins

by Lai Ying Yi

KUALA LUMPUR (May 27): Shares and company warrants in Datasonic Group Bhd rose this morning in heavy trade, following hopes on government contract wins.

This comes as the Immigration Department granting an extension of its e-government contract on foreign workers to My EG Services Bhd (MyEG) being seen as a pre-emptive move for the contract issuance.

At the time of writing, Datasonic's company warrant, DSONIC-WA, surged 11% or 6.5 sen to 65 sen on the back of brisk trading. The counter saw some 108.91 million units traded, and was the second most active counter across Bursa.

Shares in Datasonic, also listed as one of the top 20 most active counters, were up 1.3% or two sen to RM1.57.

Last Friday, MyEG said it had received notification to continue, until further notice, the provision of online renewal of temporary employment pass for foreign workers for the Immigration Department.

MyEG further said the rationale for the decision was to allow the government sufficient time to finalise the status of the extension of these agreements, subsequent to their expiry on May 22.

With the heightened optimism about potential near-term contract news flow, in a research note published today, RHB Research upgraded its target price for Datasonic to RM1.84 from RM1.67 previously, as it raised its core business target price-earnings valuation to factor in the positive catalysts.

“It is worth noting that the incumbent has been given a month’s extension on the online renewal of temporary employment pass for foreign workers (ePLKS), prompting the market to speculate that the lucrative contract could be up for tender soon.”

Other than the potential retendering of ePLKS, RHB noted that Datasonic is among the front runners for the National Integrated Immigration System's potential roll-out in June.

The firm highlighted that Datasonic is also keen to participate in the upcoming national security, border-related and digitalisation solutions given its core competency in these areas.

“Near-term potential news flow on government-related contracts include Foreign Visa System, One-Stop Centre, Foreigner Identity Card (i-Kad), Electronic Medical Records, and the National Digital ID as the government looks to accelerate digitalisation efforts,” it added.

Datasonic’s net profit more than doubled to RM20.18 million for the third quarter ended Dec 31, 2019 (3QFY20) from RM8.99 million for 3QFY19.

Revenue for the period rose to RM74.97 million from RM56.76 million.

Since the trough in mid-March, shares in Datasonic have rebounded by some 173% from a low of 57.5 sen to RM1.57, while its warrants have rallied more than 255% from the low of 18 sen to 64 sen.

Source: The Edge

https://www.theedgemarkets.com/article/ ... tract-wins

[winston]

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Datasonic’s 4Q net profit up 5.6%, declares 0.5 sen dividend

by Lai Ying Yi

KUALA LUMPUR (June 25): Datasonic Group Bhd reported a 5.6% increase in net profit to RM12.25 million for its fourth quarter ended Mar 31, 2020 (4QFY20), against a net profit of RM11.60 million last year, despite posting lower revenue during the quarter.

Due to lower supply of smart cards and passports in 4QFY20, the company posted a 10.58% decline in quarterly revenue to RM50.71 million from RM56.71 million previously.

This brings the tech firm's net profit for the full year FY20 to RM60.32 million, up 65% from RM36.53 million in the corresponding period a year ago, as revenue increased 12.74% to RM247.54 million from RM219.55 million.

At the same time, the company declared a fourth interim dividend of half sen per share, of which the entitlement and payment date will be announced in due course.

This brings its year-to-date FY20 payout to 3 sen, surpassing the 2.5 sen it announced in the corresponding FY19 period.

In a separate statement, Datasonic chairman Tan Sri Mohamed Hashim Mohd Ali said production has gradually picked up since they resumed operations in early May, after the movement control order (MCO) was eased, and new orders have been coming in.

“We consider the challenges from the Covid-19 pandemic and the resulting MCO as a small hiccup. Given the nature of our business is mainly on contract basis, orders from customers will continue to flow in.

“On the other hand, Datasonic has recently secured an additional spare parts scope for the maintenance services of card personalization centers at the National Registration Department (NRD) with a value of RM7.3 million, in addition to the current contract for maintenance services of card personalization centers at NRD which was awarded to Datasonic on June 3, 2019,” he added.

Commenting on prospects, the firm said the uncertainties arising from the Covid-19 pandemic have inevitably disrupted the global economic stability, and commercial activities, particularly international travel, is expected to have an impact on its operations.

However, it also said the pandemic had offered new business opportunities in the areas of public security, public health and also e-commerce.

“In these unprecedented business conditions, the board expects the prospects for the financial year ending March 31, 2021 to be challenging,” it said.

At the time of writing, shares of Datasonic traded down 3 sen or 2% to RM1.48, giving it a total market capitalisation of RM1.99 billion.

Source: The Edge

https://www.theedgemarkets.com/article/ ... n-dividend