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Software, digital and information technology have been the growth driver for stock markets globally. The world has obviously been on the digital track for the past many years. Look at the Top 5 most valuable publicly traded companies over the last decades.
Chart: The Largest Companies by Market Cap Over 15 Years
Since 2016, the top 5 names have not changed. In fact, they are now even bigger, making huge gains in their market capitalisation. As of market close on 2 September 2020, the Top 5 names were as follow.
Company Market Cap Change since 2016
Apple USD 2,247 billion 286%
Amazon USD 1,769 billion 386%
Microsoft USD 1,753 billion 288%
Alphabet USD 1,175 billion 111%
Facebook USD 862 billion 140%
(As of market close 2 September 2020)
Recently, AirAsia announced that the company is building the next “super app”. A number of Malaysian public listed companies have also made investments into various digital ventures.
Malaysian publicly traded companies with digital ventures
Company Market Cap Digital Ventures
AirAsia RM 2,272 million BigPay, digital platform, eCommerce
Axiata RM 27,783 million Boost, ADA, Apigate
CIMB RM 32,547 million TouchNGo eWallet
Digi RM 31,877 million altHR, Omni, iFleet, RepublicGG, EasyAdd, JomStudi
Green Packet RM 616 million Kiple – IOT, Fintech
Maybank RM 81,500 million GPay Network / GrabPay, MAE, QRPay
Warisan TC RM 67 million GoCar, MUV
(As of market close 2 September 2020)
These companies are operating in industries currently less favoured by the market. They have invested in these digital ventures in hopes of not being disrupted and/or in hopes of getting premium valuation from the market. Can they spin off these ventures as separate entities at a higher value in the future?
Look at Malaysia public listed companies who are focused in the digital technology segment. These companies are relatively smaller, in comparison to global and regional giants.
Selected Malaysian publicly traded companies in the digital and software technology segment
Company Market Cap Businesses
Dagang Nexchange RM 422 million Dagang Net, trade facilitation, cyber security solutions
GHL Systems RM 1,499 million Payment solutions
Kronologi Asia RM 348 million Cloud storage solutions
ManagePay Systems RM 121 million Payment solutions and gateway, eCommerce, eWallet
Omesti RM 324 million Enterprise software
Revenue Group RM 509 million Payment solutions
(As of market close 2 September 2020)
The leading digital / technology public company in Southeast Asia, SEA Limited was valued at USD 79 billion, as of market close on 2 September 2020. Will any Malaysian publicly traded technology company ever achieve a market cap of more than RM 300 billion?
Digital technology in highly scalable verticals are often a winner-takes-all market. The global tech giants are already strongly entrenched in various verticals. Amazon, Apple, Google and Facebook were questioned by the US Congress back in July 2020 on their alleged anti-competitive strategies. Malaysian companies attempting to operate in verticals dominated by these players are very likely to lose.
In the spirit of Merdeka, patriotic Malaysians often wish that there will come a day that we can proudly say that we have our own Malaysian global technology unicorn (USD 1 billion), decacorn (USD 10 billion) or even hectocorn (USD 100 billion) (without having to explain that Grab was a Malaysian company before moving to Singapore). Will the day come? Or will Malaysian companies just remain as plain boring corns? (as the popular Malay proverb “Jaguh Kampung”)
Did we missed out any other companies that have invested into software technology? Let us know by commenting below.
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https://klse.i3investor.com/blogs/JawResearch/2020-09-04-story-h1513316326-Hidden_Malaysian_Unicorns_or_Plain_Malaysian_Jagung_Corns.jsp
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