XOX confident revenue will soar this year

KUALA LUMPUR: XOX Bhd, en route to a listing on Bursa Malaysia's ACE Market, has forecast its revenue to soar by more than 10 times this year, from RM20.07 million it registered in 2010.

The mobile virtual network operator (MVNO) has forecast a revenue of RM249.47 million.

Chief executive officer Ng Kok Heng said the number is possible due to the "established multi-billion ringgit industry we are in and where opportunities are huge".

Speaking to reporters after the launch of its IPO prospectus in Kuala Lumpur yesterday, Ng said the company is confident of achieving a net profit of RM19.77 million in the current year ending December 31 2011, compared to a loss of RM15.98 million last year.

"Going forward, we will grow our subscribers and tap on the opportunities within this industry. Malaysia's penetration rate is about 120 per cent now compared with 137 per cent in the neighbouring country," he explained.

The company is also growing its average revenue per user (ARPU), he added.

According to the prospectus, the forecast revenue and profit "have been based on assumptions to the group's subscriber base and average monthly revenue from the sales of recharge vouchers per subscribers."

Todate, Ng said XOX, which taps on Celcom's network infrastructure, has more than 400,000 subscribers, of which 70 per cent are active.

The company is aiming to increase this base to about 1.5 million by end of this year.

The group's average ARPU, meanwhile, is forecast to be about RM40 (prepaid) and RM76 (postpaid).

"This is consistent with the average prepaid and postpaid ARPU of the MNOs as at the fourth quarter of 2010 amounting to about RM39 and RM95 respectively."

Ng said the company will soon introduce an "e-wallet" application which will allow its subscribers to make cashless electronic payments via their mobile phones.

Consumers will have the cashless convenience of topping-up their prepaid mobile accounts, pay their postpaid bills, transferring funds from one e-wallet to another and make purchases from XOX or selected participating merchants.

He said favourable response to this new feature is anticipated and the three-year old company is targeting to launch two new applications every year.

Ng said XOX intends to grow its dealership network by 50 per cent this year from the current 2,000.

He pointed out that in the past three years, XOX had garnered a 20 per cent market share in the MVNO market and has opened eight service centres nationwide.

Targeting mainly the mobile prepaid market, the company - which expects to be listed on June 10, is the only MNVO that offers both 2G and 3G services in the country.

It is making a public issue of 46.8 million new shares at 80 sen each, which will raise RM37.4 million in proceeds.

AmInvestment Bank Bhd corporate finance director Anuar Omar said upon listing, XOX will have a market capitalisation of almost RM250 million, making it one of ACE Market's biggest market debut.