ConnectCounty eyes cybersecurity

PETALING JAYA: ConnectCounty Holdings Bhd proposes to diversify into the cybersecurity business following continued low margins from its core business in the interconnect industry, and potential of a joint venture business it entered with LE Global Services Sdn Bhd (LGS) last year.
ConnecCounty designs, manufactures, services, and sales and markets cables, wires, connectors and related products.
The group said its joint venture company with LGS, Connect Security Solution Sdn Bhd (CSSSB), has identified projects amounting to about RM2.2 million from potential customers in financial services and telecommunications sectors as well as small and medium enterprises.
The JV business hopes to provide information technology security consultation and services, technical assistance on operating computers as well as information technology security training programmes.
On March 14, CSSSB secured a contract amounting to RM0.20 million from LGS to kickstart the JV business. On April 10, it entered into a management services agreement with a former LGS employee Alex Tan Seng Keng, who is a Certified Information Systems Security professional.
The board anticipates that CSSSB may contribute more than 25% of the group’s net profit in the future. It will put forward the proposal for approval of shareholders at an EGM to be convened.
ConnectCounty said the core business of the group has been affected by relatively lower margin primary due to product mix, general reduction in selling price, competitive pricing and increase in commodity costs despite efforts implemented on cost reduction programme.
For the financial year ended (FYE) Dec 31, 2017, the group registered an audited consolidated loss after taxation of RM0.73 million despite the increase in its revenue of 49.51% to RM122.16 million (FYE 2016 : RM81.71 million).
“In view of the foregoing, the group has identified the JV business as new business opportunities for the group to diversify its revenue and earnings base and reduce its dependency on its existing business. In light of the growing global incidents of cyber security threats and crime resulting in higher awareness of need to prevent cyber security risks, corporations tend to outsource the handling of the cyber security threats to specialist companies such as CSSSB,” ConnecCounty said in its filing with Bursa Malaysia.
With no prior experience in the cybersecurity business, ConnectCounty will depend largely on LGS in terms of provision of technical assistance, sharing of industry information and referral of customers/suppliers to CSSSB.
The stock closed unchanged at 15.5 sen today with some 194,800 shares changing hands.