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Syntonic Limited (ASX:SYT), a mobile services technology company from Software & Services sector announced that it has entered into Freeway reseller agreement with Thang Long Event Limited (âTLCâ) to sublicense its Freeway platform to MobiFone Telecommunication Corporation as a white-labeled Freeway service and will be branded as âmobifoneGoâ.
Mobifone is one of the largest mobile providers in Vietnam with approximately 50 million subscribers. In 2017, it successfully raised around US$2 billion.
Initially, MobiFone will deploy its Freeway Overpass Services, which will allow its customers to purchase the content of the content subscription with unlimited data access. It's engineering and testing phase is in progress and is expected to launch in early Q4 of FY2019. Â
Freeway reseller agreement is a non-exclusive agreement which the company has entered for three years. During the period, SYT will be generating revenue in the form of professional service fees and through mobifoneGo app package sales under the revenue share arrangement. It will also generate revenue through data package sales, wholesale data sales, affiliate fees, advertising, and support fees. On the other hand, as per the agreement, Syntonic will be responsible for the customized product development. It will also provide tier2 and tier3 technical support. It will also be integrating Syntonic Freeway service with the MobiFoneâs billing system.
The official listing of SYT on ASX was 12 June 2007 where the performance of the company is consistently negative. In 5 years, the performance of SYT was -50%. SYT's last one-year performance was 66.67%.
For FY2018, which ended on 30 June 2018, Syntonic Limited made a net loss of $5,386,841 due to increased operating expenses, share-based payment expense and staff expenses. The balance sheet of Syntonic Limited appears healthy with a net asset base of $4,502,168 and a debt to equity ratio of 0.174. It indicates that the company is financially sound to manage its long-term obligations. Its lower debt to equity ratio means that during the period, the company tried to use its resources in case of financial requirement instead of approaching for an outside source. Syntonic has a total current asset of $5,277,290 and a total current liabilities of $785,080 which indicates that the company can efficiently manage its working capital requirements and also can clear its short-term obligations. As compared to FY2017, there was an increase in the accumulated losses of SYT which indicates a weak operating performance of the company.
As a result of an effect of movement in exchange rates on cash held, there was a decrease in the net cash and cash equivalent. By the end of the FY2018, SYT was left with net cash and cash equivalent of $4,947,217.
By the end of the trading on 11 January 2019, after the announcement of the Freeway reseller agreement, the share price of SYT zoomed up by 16.667%. The closing price of the share was A$0.007 which is 0.001 points above its previous trading dayâs closing price which is towards 52 weeks low price. The stock holds a market capitalization of A$17.89 million.
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