For its three months ended March 31, 2017, the group’s net loss narrowed on a quarter-on-quarter basis to RM953,000 with a turnover of RM4.46 million, from a net loss of RM2.07 million in the three months ended Dec 31, 2016, when it clocked in a revenue of RM3.52 million.

KEYASIC - Anything Interesting (Khazanah Holds 23% Stake) !!!

It has been in the red for the last four years (Till end FY2016), is banking on securing recurring sales for its Internet of things or IoT products, which it has spent the last five years developing, to return to profitability, which it expects to happen by the second half of its financial year 2018 (FY18).

The group designs and manufactures chips for IoT products has failed to turn a profit in the last four years because the IoT industry is still new. It takes time [to make a profit] because IoT is at its infancy, not only in Malaysia, but everywhere in the world. It takes a longer time because the end users in the market are usually non-IT users and they do not have the correct infrastructure [yet to make use of its chips].

KeyAsic has invested a large amount, over US$20 million (RM84.4 million) to develop its products.

Among the IoT products the group has developed in the past five years (2012-2017) are its system-in-a package or SiP chip, SPG101, and system components like WiFi SD Card called K-Card, and its wire-less USB flash drive, K-Drive 9.

In May 2017 two more new chips have gone into production, namely its Numeric matrix (NM) CPU and PCI-e SoC (system-on-a-chip), which took four years to develop, with a collective investment of about US$3 million. The chips were co-designed with RC Module, a leading system and chip design company in Russia.

The NM CPU chip, in particular, is involves scientific calculations. [Up until now (end May 2017),] it has been used on much larger scales, such as in satellite and aerospace products, like to track the weather for forecasts, and for image and voice detection.

So far (Till end May 2017), Key Asic has secured RM7 million worth of contracts for the initial shipping and production of the two newer chips, which will see the deployment of 10,000 units of each chip into the market, from which it can gather feedback and work out any logistical issues — a process likely to take at least six months — before recurring sales orders will come in.

After the spate of investment spendings in the last five years, its top officials said the company is now (End May 2017) in a firm footing to court customers. KeyAsic will know if the products can secure recurring sales contracts from its customers, from between the fourth quarter of 2017 to the first quarter of 2018, for all its chips.

For its three months ended March 31, 2017, the group’s net loss narrowed on a quarter-on-quarter basis to RM953,000 with a turnover of RM4.46 million, from a net loss of RM2.07 million in the three months ended Dec 31, 2016, when it clocked in a revenue of RM3.52 million.

There were no year-on-year comparative figures as the group had changed its financial year end from Dec 31 to May 31.

For the quarter ended May 2017, it posted a net loss of RM1.449 million or EPS of 0.17 sens.

As at March 31 2017, the group’s accumulated net loss stood at RM45.28 million.

Malaysia’s government investment arm Khazanah Nasional Bhd remains a substantial shareholder of Key Asic, with a 23% stake as at May 4 2017, while former chairman of China Development Industrial Bank, Taiwanese Benny T Hu @ Ting Wu Hu, has been an independent non-executive director of the group since 2009.

Eg has an indirect interest of 39.06% in Key Asic, together with three others, by virtue of his deemed interest in Key Asic Ltd, the group’s largest shareholder with a 39.06% stake as at April 6 2016.

Eg also has a direct stake of 0.18% in Key Asic.