This article first appeared in The Edge Malaysia Weekly on March 20, 2023 - March 26, 2023

Artroniq Bhd has been in the news since last year for various reasons — from its diversification into precision engineering and machinery parts manufacturing to money lending as well as a private placement exercise and a bonus issue of warrants.

With the news flows, the ICT firm’s shares have been actively traded, rising to above RM1 a year ago, before paring gains to close at 68.5 sen last Friday, valuing it at RM224.9 million.

Continuing the trend, Artroniq last week bagged a US$10 million (RM44.8 million) contract from Cambodia’s Panda Commercial Bank Plc for the research and development of blockchain-based financial services, including but not limited to the development of basic blockchains, functional API, web and mobile-related solutions.

The contract is for two years until March 31, 2025. This follows the letter of intent signed between the two parties last November.

Panda Commercial Bank commenced operations in February 2020, with the target of opening 30 branches throughout Cambodia, from the current two. It also plans to become a leading digital bank in the region, according to its website.

One may wonder on what basis the agreed price was set at US$10 million? Can the job be executed with the existing talent or will Artroniq need to secure a new batch of talent for such a big deal?

Since the foray into the ICT business in December 2018, Artroniq — formerly known as Plastrade Technology Bhd — has been banking on the point-of-sale systems segment to turn around its operations. For the financial year ended Dec 31, 2022, it remained profitable, with RM1.13 million in net earnings, lower than the RM4.82 million achieved a year ago.

It is understandable that Artroniq needs new income streams to sustain its financial performance, but will it be able to juggle the various new ventures it has taken on?

Just this month, Pekat Group Bhd decided to surrender its moneylending licence, owing to the change in its business strategy, when many locally listed firms, including Artroniq, have been awarded such a licence.

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