Walk Through iSentric’s June Quarter Business Activities, Centred Around SE Asian Digital Commerce Sector

Summary

• iSentric has completed a business and opportunity review, delivering renewed focus on digital payments and mobile banking businesses, as well as more precise communication with its existing activities and market positioning.
• ICU has made strong additions to its executive leadership team and new senior executive appointments to the Malaysian business, while core fintech platform has been rebranded to IOU Pay Platform.
• Given surging demand and new revenue growth opportunities across Malaysia and Indonesia, ICU’s mobile banking and digital payments platform has been upgraded with the addition of new features as well as capabilities.

iSentric Limited (ASX:ICU) is an advanced fintech and digital commerce software and services provider facilitating secure transactions. The ASX-listed Malaysia’s top-notch mobile banking / mobile payment solution provider seems to be garnering a lot of attention among investors, with its stock delivering an outstanding return of more than 533% in the last three-month period, as of 18 August 2020.

The Company serves the top 20 banks in Malaysia and large telcos and corporates in Malaysia and Indonesia via its business divisions, comprising mobile banking, digital payments and digital services. Its software and services facilitate institutional customer base to securely authenticate end-user customers and process banking, purchase and payment transactions.

ICU has recently completed a review of businesses and market opportunities, to align more clearly with its fintech and digital commerce industry terminology as well as communicate more precisely with its existing activities and market positioning.

As part of the review:

• Enterprise Mobility business division has been renamed Mobile Banking
• Digital Media and Content business has also been renamed and reported as Digital Services
• Digital Payments business division did not witness any change

As highlighted in the last quarter, the Mobile Banking and Digital Services businesses of ICU, specifically gaming and media content services, witnessed a decline in user activity, owing to the COVID-19-led restrictions impacting business activities in the South East Asian region including Malaysia, Indonesia and Myanmar.

However, demand and business volumes for digital payments have experienced traction amid many people still working from home and delivery of increased COVID-19 products and services by new and existing e-commerce merchants. This highlights a positive market trend for enlarged consumer and business purchases for essential products and services via online marketplace. Notably, in terms of transaction volumes and values, an upward trend is being witnessed in e-Money purchases, mobile banking transfers, food and beverage supplies, utility bill payments, and prepaid airtime and data.

It is worth noting that these trends present significant growth opportunities for ICU, which already processes over 18 million mobile banking and payment transactions per month for Malaysia’s top 20 banks and major Malaysian and Indonesian telecoms and firms.

As the Malaysian and Indonesian governments are encouraging micro-financing and e-wallet initiatives, the Company intends to optimise opportunities by capitalising on the strength of its technology platform in the areas of:

• customer authentication and e-KYC (paperless electronic Know Your Customer)
• secure payment processing
• e-commerce

Let us now quickly gaze through some of the other significant activities of ICU during the quarter ended 30 June 2020 and subsequent period.

New Features and Capabilities added to Technology Platform

June quarter marked the upgrade period for the Company’s mobile banking and digital payments platform via the addition of new features as well as capabilities in response to surged demand and opportunities for growth in new revenue streams across Malaysia and Indonesia. Furthermore, these advancements encompass the system’s ability to integrate with existing bank, non-bank and telecom customers to process micro-finance consumer loan payments, as well as credit score, authenticate and on-board customers.

Notably, the Company is making investments, with development and testing for Buy Now Pay Later instalment payment, account management and analytics planned during the September 2020 quarter.

Core Fintech Platform and Malaysian Subsidiary Rebranded

During the June quarter, the Company unveiled the rebranding of its core fintech platform to IOU Pay Platform, formerly referred to as Mobility2U, MobilityPay & MobilityGames.

Moreover, Isentric Wireless Sdn Bhd, a Malaysian subsidiary of Isentric Sdn Bhd, was renamed as IOU Pay (Asia) Sdn Bhd.

ICU Strengthened Leadership with Board Restructuring and New Appointments

Of late, the Company added legal, governance and compliance expertise to its Board and made significant additions to the Malaysian board. An in-country CEO, Indonesia appointment is pending.

Corporate Update: ICU Boosts Position with Latest Placement

In early July 2020, the Company announced to have received funding commitments from institutional investors for ~ AU$1.5 million at a proposed issue price of AU$0.0158 for each new share. Notably, the placement was to be conducted in two tranches.

During mid-July 2020, the Company unveiled to have successfully raised AU$409,429 from institutional investors by way of placement of more than 25.91 million ordinary shares under its existing 15% capacity (tranche 1). Furthermore, commitments were secured for additional AU$1,108,054 (tranche 2), with the placement of over 70.13 million ordinary shares to sophisticated investors.

Proceeds raised would be directed towards working capital, accelerating sales growth and funding product development.

During the June 2020 quarter, the Company noted receipts from customers worth AU$1,784,000. At the end of the period, ICU had cash and call deposits of AU$578,000.

In a nutshell, multiple opportunities are brewing up in the SE Asian digital commerce sector with swelled volumes and values. ICU opines that it remains well positioned to take advantage of the opportunities, on the back of consolidation and growth of its business divisions, new product development, funding, improved communication and market positioning, and strong leadership team additions.

On 19 August 2020 (AEST 11:57 AM), ICU was trading at AU$0.040, up by 5.263% from the previous close.