KUALA LUMPUR: Rakuten Trade remains bullish on AppAsia Bhd's multi-year growth story.
This is fuelled by AppAsia's recurring income stream from eConfirm.my platform and recent collaboration with Telekom Malaysia Bhd to digitalise the iconic Yellow Pages.
AppAsia, said Rakuten, was also eyeing regional expansion to Thailand and Indonesia and was in talks with related parties to strengthen its regional footprints
AppAsia is the digital platform developer of eConfirm.my, which is the first and only industry-wide electronic bank confirmation platform in Malaysia.
The digital platform has 13 major participating banks and over 400 audit firms in Malaysia covering about 80 per cent of the market.
This is similar to Confirmation, a digital confirmation services provider operating across 170 countries serving 16,000 audit firms, 4,000 banks and 5,000 law firms globally which was acquired by Thomson Reuters in 2019.
The platform is a collaboration agreement with the Malaysian Institute of Accountants for 12 years until 2030, on a pay-per-transaction revenue model basis with RM15 per successful confirmation.
Rakuten said currently for bank balances, deposits and loan confirmation, AppAsia was working on potential add-ons to confirmation services for hire purchase, housing loan and legal confirmation.
"AppAsia's next catalyst for growth is its recent collaboration agreement with the subsidiary of TM to transform the iconic Yellow Pages Business Directory into a Digital Business Community of the e-marketplace.
"It has a revenue-sharing model with TM which we believe is a strategic move that will provide the next growth impetus," the firm said.
Yellow Pages is the leading business directory in Malaysia with searchable online of 500,000 strong business entities.
Rakuten has recommended a "buy" on AppAsia with a revised target price of RM1.18.
The target price is based on discounted cash flow and the sum of parts valuation which translates to the financial year 2021 price-earnings of 24 times.