Datasonic Hopes Fine Domestic Record Will Boost Overseas Venture

By | March 13, 2017

PETALING JAYA: Datasonic Group Bhd, the company that supplies the government with its electronic passport materials, is hoping that its track record built up so far in the domestic market would pave the way for it to venture abroad.

Datasonic group managing director Datuk Hanifah Noordin told StarBiz that securing the mandate from the government enhances the group’s track record in providing electronic passports.

“This will in turn propel the marketing of Datasonic’s integrated passport solution overseas. Having secured contracts for additional polycarbonate data pages and personalisation services, five-year supply of passport chips and 5-year supply of passport booklets to the Home Ministry, we will be able to stringently monitor the quality and security control of the passports as well as improve operational efficiency,” he said.

Last Thursday, Datasonic secured a RM79.72mil contract to supply an additional 2.8 million passport polycarbonate datapage and personalisation services to the Immigration Department.

 As such, the total quantity of passport polycarbonate datapage and personalisation services has risen from 10 million to 12.8 million units.

This also increases the total contract value from RM284.7mil to RM364.42mil over a period of five years commencing from Feb 1, 2013 to Jan 31, 2018.

Datasonic commenced its new role as the official supplier of national passport booklets in December 2016.

“However, Datasonic is not the sole contractor of passports. We are complementary to two other vendors who supply and maintain the passport database and auto-gates,” said Hanifah.

According to RHB Research, the group is in the midst of finalising a sub-contract agreement with Percetakan Keselamatan Nasional Sdn Bhd for interim supplies up to May.

Beginning June 1, Datasonic will commence commercial production of passport booklets.

Hanifah said there was potential for Datasonic to venture abroad as the Malaysian passport was a testament of the group’s capability in producing passports that were internationally recognised in terms of quality and security.

Taking into account the challenges of globalisation and foreign exchange fluctuations, Datasonic is currently pursuing strategic partnerships with selected world-class players in the market for joint venture opportunities and technology transfer.

“In a rapidly evolving information and communications technology (ICT) landscape, we invest in research and development (R&D) and human resources to continue to develop innovative and integrated solutions to stay ahead of the competition.

“Our philosophy is to provide cheaper yet highly secured and innovative ICT solutions.

“We earmark an estimated RM3mil per annum on R&D,” added Hanifah.

Going forward, the group intends to tap further into the financial technology or fintech scene.

Following the Internet and mobile Internet revolution, fintech has grown exponentially.

“There is huge business potential in fintech, and we continue to invest in R&D on fintech.

“We are on the lookout for business opportunities in the digital economy, such as e-commerce, mobile payments and big data analytics to capitalise on our existing customer base in the financial industry,” said Hanifah.

In fact, Datasonic’s first venture into fintech was the Maybank self-service re-carding kiosks, which significantly reduced waiting time for the replacement of PIN-enabled cards.

Other financial institutions, including some from Indonesia, have since approached Datasonic for strategic partnerships in the group’s self-service kiosk solutions, which can later be adapted to carry out opening of accounts as well as processing e-payments.

In addition, Datasonic is the number one provider of chip-based Euro MasterCard Visa financial cards in Malaysia.

Its customers include Maybank, CIMB Bank, RHB Bank, and Hong Leong Bank, among others.

The group’s 25,000 sq ft Regional Personalisation Center, which happens to be the largest in South-East Asia, is equipped with high performance personalisation equipment from Datacard USA.

Thus, Datasonic has sufficient capacity to expand its financial business locally and regionally.

The group also plans to supply driving licences and road tax stickers for vehicles.

According to RHB Research, Datasonic is in the midst of finalising its proposal with an official submission.

The presentation to relevant authorities is likely to be held in May or June, with the official award to take place in the second half of the year.

“Official statistics from the Road Transport Department state that there are 26 million registered vehicles on the road and 14.7 million registered drivers as of 2015.

“Based on an average selling price of RM7.50 to RM8 per driving licence and RM2.30 to RM3 per road tax sticker, this could translate into an annual revenue stream of close to RM100mil,” said RHB Research in a recent report.

For the third quarter ended Dec 31, 2016, Datasonic registered 4% lower revenue of RM73.21mil and 50% lower net profit of RM7.97mil, compared to the preceeding quarter.

This was attributed to the lower quantity of components delivered for smart cards and lower gross profit margin.

For the current quarter, Datasonic has received an order for one million units of MyKad and one million units of MyKad consumables, after two consecutive quarters of low MyKad deliveries.

RHB Research expects future deliveries to match the current demand of 3.3 million to 3.5 million copies per annum.

Source: The Star