Tuesday 17 October 2023

SMETRIC - A dark horse in the digital security space?



Why Securemetric Berhad?

  • In the right industry. Growth opportunities in digitalisation and increasing demand for digital security solutions.
  • A leading and prominent digital security solutions provider in ASEAN.
  • Being a small-base microcap company, with a current market cap of merely RM89m, smaller than some LEAP market-listed tech companies, there could be significant room for growth.
  • Healthy balance sheet with a net cash position of RM24.24m and zero borrowing.
  • Increasing revenue from recurring maintenance services.

About Securemetric Berhad (SMETRIC)

Securemetric is one of Southeast Asia’s leading regional players in the field of digital security solutions with a core focus in Software Licensing Protection (Software License Dongle, Software Protection Dongle), 2-Factor Authentication (2FA), Advance Identity & Access Management, Public Key Infrastructure (PKI) solutions and Cryptography.

Securemetric IPO Prospectus

Securemetric’s key markets include Malaysia, Indonesia, Philippines, Singapore and Vietnam, with customers ranging from public sector to large regional and multinational companies.

A Potential Beneficiary of Budget 2024?

Budget 2024

In Budget 2024, the government will accelerate the development of the National Digital Identity to improve the efficiency of the civil services.

Malaysia’s National Digital ID project aims to create a Verifiable Platform of Trust that will be utilised by the public and private sectors to verify the identity of their respective users when conducting digital transactions. The government of Malaysia is implementing targeted subsidies, and the rollout of the National Digital ID, which can be used to authenticate a person's identity, may be crucial for the successful implementation of the targeted subsidies.

“Apart from that, Rafizi said, Padu serves not only as a tool for targeted subsidies but also for optimising social assistance, ensuring accurate allocation and preventing benefit dilution or unfair distribution. Additionally, it provides a foundation for advancements in GovTech, Digital ID, and product-building.”

( https://theedgemalaysia.com/node/685513)

Digital identity requires PKI to function. The solutions offered by Securemetric have empowered countries to digitise their identities,  enabling a complete mobilisation of their citizen’s electronic services.

Digital Signature – Another Growth Driver for Securemetric?

What is SigninigCloud

In an era where digital interactions have become the norm, the need for secure and efficient online transactions has never been more crucial.

SigningCloud is a Signing as a Service (SaaS)-based digital signing solution powered by Securemetric Technology Pte Ltd, a wholly-owned subsidiary of Securemetric Bhd.

SigningCloud makes document signing easy. Sign your documents anytime, anywhere with almost any device, be it your personal tablet or your work computer. The secured and cost-effective electronic signature solution simplifies workflows, eliminates paperwork, and ensures compliance.

All signatures created via the platform can be recognised as effective, valid and enforceable under the Electronic Commerce Act 2006 and also the Digital Signature Act 1997 if the signature is verifiable by a valid digital certificate issued by any licensed certification authority in Malaysia.

Recently, it has announced its partnership with SingPass, Singapore’s trusted authentication gateway, to revolutionise the security landscape and offer Singaporeans and advanced solution for secure and efficient online transactions. (Source: SigningCloud Collaborates with Singpass to Safeguard Digital Transactions with Advanced Security Measures in Singapore)

What is SingPass

SingPass (https://www.singpass.gov.sg/main/) is every Singapore resident’s trusted digital identity for easy and secure access to over 2,000 government and private sector services online and in person.

Of the 4.5 million residents on SingPass, more than 3.5 million users are on the SingPass app. Users can log in to digital services, prove their identity over counters, digitally sign documents and do more with the SingPass app.

SingPass is managed by the Government Technology Agency (GovTech) and is one of eight strategic national projects that drive Singapore’s Smart Nation vision. 

Digital signatures play a vital role in ensuring the authenticity and integrity of electronic documents and transactions. Through this collaboration and as one of Singpass’ signing partners, SigningCloud empowers SingPass users in Singapore to sign documents digitally, eliminating the vulnerability of traditional paper-based signatures. Backed by SingPass’s high-security authentication measures, SigningCloud’s digital signatures are legally binding and recognised under Singapore’s Electronic Transactions Act.

What sets SigningCloud apart is its seamless integration with Singpass, the gold standard in authentication gateways. Singpass, leveraging signing certificates issued by the National Certification Authority, empowers businesses and their customers to digitally sign agreements securely. By utilising SingPass's robust infrastructure, SigningCloud ensures that each signature is cryptographically linked to the signer, providing an additional layer of security.

The collaboration serves as an endorsement of SigningCloud’s product and services, particularly due to its partnership with the Government of Singapore. As a partner of a Singaporean government agency in the field of digital signatures, SigningCloud’s market awareness and confidence will greatly benefit. Consequently, the company will find it easier to market its products and services.

Also, the collaboration will Increase the likelihood of SigningCloud realising its vision of cross-border signing and playing a significant role in the digital signing ecosystem in the ASEAN region.

The collaboration will expand SigningCloud’s recurring revenue. According to its website (https://signingcloud.com/my/pricing/), the service is billed on a monthly basis. 

More about SigningCloud (https://www.thestar.com.my/business/business-news/2021/10/20/sign-off-digitally-with-confidence)

Learn more about SigningCloud and its benefits:

Youtube: https://youtu.be/cLF16YBqeC4

Signing Cloud Your Trusted Signing Platform


 Existing customers

SigningCloud’s customers include industry leaders such as Atlantic Blue, a wholly-owned subsidiary of Solarvest, as well as prominent property developers such as Gamuda Land, S P Setia and Sunway. Undoubtedly, these companies have compelling reasons for incorporating digital signatures into their business operations.


Product testimony by Solarvest

(page 98 of Solarvest’s Sustainability Statement 2023)



Growing Recurring Income

While the revenue has remained relatively flat for the past 5 years and the group has yet to report a meaningful bottom line, it should be noted that the contribution from the Others segment, primarily from recurring maintenance service charges, has been increasing.

The contribution of the Others segment to the group’s total revenue has progressively increased from 5.5% in 2015 to over a third currently.

Moving forward, as the group completes more projects, we can expect to see an increasing contribution from the recurring maintenance service charges.

Once Securemetric reaches a critical mass, coupled with the recurring income from the maintenance service charges, we may start to see the group reporting meaningful earnings.

Given the rise of the digital economy and the growth potential in the tech sector, tech companies listed in Bursa Malaysia command a premium in valuation. With a current market cap of merely RM89m, this company is smaller than some LEAP market-listed tech companies. Will the rollout of the  National Digital Identity project and increasing adoption of digital signature help this net cash microcap company leapfrog to become a significant player in the ASEAN market for digital security solutions? Perhaps this stock deserves a place on your radar screen.

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