Metronic says venture into IOT, e-commerce 'not tantamount to diversification in operations'

KUALA LUMPUR, Aug 8 (Bernama) — Metronic Global Bhd said its venture into the Internet of Things (IOT), logistics technology and e-commerce does “not tantamount to (a) diversification in operations” with regard to Main Market listing requirements but only a “diversification into a new business channel.” 

The group said “the amount of investment was less than 35 per cent” as it replied to queries by the stock market regulator.

“In addition to that, the revenue to be generated from the platform that is in the form of merchant’s fee and commission is also expected to be less than 25 per cent of the group’s revenue,” it added in the stock exchange filing.

Metronic expects to generate a total gross software merchandise turnover of RM100 million in the next five years following its unit Metronic Integrated System Sdn Bhd's venture into IOT, logistics technology and e-commerce.

“We would like to highlight that most of the merchandises are related to its engineering services and products which include construction engineering equipment and parts, security systems, smart home products, digitalise products for building management section and digital technology industry,” it said. 

The regulator asked Metronic to provide the basis and justification for the group to generate RM100 million in the next five years from this new venture.

Metronic said the RM 100 million gross merchandise value was arrived based on an average of 4,450 merchandised items with an average price of RM2,000 per unit transacted per year.

However, for the first year it only “estimated a total of 1,500 merchandised (items) and subsequently at compounded annual growth rate (CAGR) of 77 per cent,” it said. 

Metronic said it started its IOT, logistics technology and e-commerce business busines on July 16, 2019 via the engagement of a system developer, with the development of the software and platforms having been carried out in a few phases.

— BERNAMA