| KUALA LUMPUR: Rexit Bhd is believed to be on the verge of securing the Employees Provident Fund (EPF) agreement on the development and supply of a software that enables EPF contributors to draw on their savings for medical expenses.
A source familiar with the matter told The Edge Financial Daily that the deal would be positive for Rexit's top-line growth but the project's estimated initial development cost of around RM12 million would put a dent on its bottom line in the coming quarters.
Rexit is also believed to be the only company appointed by EPF to work with the Federation of Investment Managers of Malaysia (FIMM) on developing a software that facilitates online purchase of trust units from EPF contributors' accounts.
Although the group would only take a small cut, the sheer size of the transactions was sufficient to generate millions, an analyst at a local research house said.
This came three months after the exit last December of Marubeni Corp as Rexit's substantial shareholder, which dented the international ambitions of the information technology solutions company. Rexit focuses mainly on providing software applications for the insurance industry.
In December, Marubeni disposed of some 18.93 million shares or its entire 10% stake in Rexit, in a move that raised concern about the company's international expansion plan.
In 2006, Rexit set up a 51%-owned subsidiary company, Rexit International Sdn Bhd, with Marubeni holding the balance of 49%, to market its insurance software products abroad, with focus on four main markets — Japan, Hong Kong, Thailand and Indonesia.
While news on its overseas ventures have been scarce, Rexit International appears to have broken even in Hong Kong and expects its maiden profit contribution to be reflected in the current financial year ending June 30, 2010.
Rexit International was appointed by Asia Insurance Co Ltd of Hong Kong in June 2007 to provide insurance software and services. It was Rexit International's first overseas contract.
On the local front, one of Rexit's main income earners is its "e-insurans" gateway for insurance companies and the road transport department for car insurance renewal.
Rexit Venture Sdn Bhd is the largest shareholder in Rexit with a 37.69% stake.
Other major shareholders include T Rowe Price International with 7.71% and HSBC Holdings plc with 5.63%.
Rexit shares ended five sen lower to 50 sen last Friday on a volume of just 400 shares. The stock has fallen 5.2% this year, compared with a 3.1% gain by the benchmark FBM KLCI.
This article appeared in The Edge Financial Daily, March 29, 2010. |
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