Incorporated in 2003, Cloudpoint Technology (Cloudpoint) is a home-grown IT solutions provider, focusing on enterprise networking, cybersecurity, professional IT services as well as cloud services and software applications.
The company has two business models, its one-off project-based-enterprise networking and cybersecurity solutions, followed by recurring income from the professional IT services, said CGSCIMB in a recent report.
Cloudpoint mainly serves local enterprises, particularly the financial institutions and technology services providers. Other clientele includes the telecommunications, education, construction, oil and gas and property industries.
Cloudpoint recorded a 3-year revenue and core net profit compounded annual growth rate of 21% and 29% respectively, with cybersecurity solutions leading the growth, followed by enterprise networking (13%) and professional IT services (6%).
The improvement in the company’s bottom line was also supported by a 4-year average core net profit margin of 16%. Cloudpoint’s core net profit rose 33% year-on-year to RM13.9 million in financial year 2022, boosted by strong revenue growth, mainly from enterprise solutions and cybersecurity.
Both segments recorded higher sales on the back of new projects secured with better gross profit margin, attributable to higher complexity and greater scope.
However, recurring revenue from the professional IT services dropped marginally by 0.2% points as a one-off discount was given to customers.
Gross profit after tax margin wise was lower in financial year 2022 due to higher administrative costs as well as higher selling and distribution expenses. Cloudpoint has a net cash position of RM11.7 million as of 31 December 2022.
The organisation plans to utilise 39% of the initial public offering proceeds of RM40.4 million for working capital, followed by business expansion (33%), relocation of corporate office (19%) and the rest for listing expenses (9%).
As of 10 April 2023, the group registered one-off project-based unbilled purchase orders of RM41.8 million (74% from enterprise; 23% from cybersecurity; 3% from cloud services). 77% of the purchase orders are expected to be recognised in 2023, while 23% in 2024.
The group also secured recurring contracts worth RM23.5 million, of which 29% of the contract value are assumed to be fulfilled in 2023, 38% in 2024 and the balance in 2025. Note that the tenure is between 1 to 3 years.
As part of the expansion plan, Cloudpoint intends to set up a security operations centre in its existing corporate office to increase the competitiveness in securing managed cybersecurity services projects.
Besides, the group also aims to upgrade its current network operations centre to provide new managed network services as well as to establish new public cloud infrastructure to expand its cloud services and software applications segment.
The company plans to purchase a new corporate office located at Pavillion Damansara Heights. The relocation plan from its current rented corporate office at Solaris Mont’ Kiara is expected for completion by the first half of 2026.
As at LPD, Cloudpoint is the authorised partners for multiple established technology vendors, including Cisco Systems, Huawei Technologies Co.Ltd, Amazon Web Services and ServiceNow.
The company is also Sunline’s first sales and service partner in Malaysia following the Memorandum of Understanding (MOU) signed in February 2023. Sunline is a China’s public-listed banking software and technology services company.
Key risks to the group include sector concentration risk in the financial services industry and cybersecurity risk. Cloudpoint aims for listing on the Bursa Ace Market on 29th May 2023 with a target market capitalisation of RM202 million. The final day for initial public offering application will be on 15 th May 2023.
