IPO..ECS ICT Bhd ... Jan10

ECS ICT Bhd, an information and communication technology (ICT) products distributor, has been tentatively slated to be listed on the Main Market of Bursa Malaysia in early March.

The company was established in 1985 and now generates RM1bil in revenue from its core businesses of distributing ICT products such as notebooks and personal computers to retailers, as well as providing servers and networks systems for the “enterprise systems” segment.

It was awarded MSC status by the Multimedia Development Corporation (MDeC) in 2004.

The company has long term working relationships with more than 30 global brand names, the longest being 22 years with Hewlett Packard.

The company has a nationwide distribution network of more than 2,500 resellers consisting of retailers, system integrators and corporate dealers.

Its revenue surpassed RM1.16bil (with RM19.8mil profit) in 2008.

It charted a compounded annual growth rate (CAGR) of 29.9% from1998 to the financial year ended December 31, 2009. The company had been achieving “more than a double digit growth and is above the industry’s average growth.”

The company is positioned as a two-tier distributor whereby ECS sells “value products” such as network systems and servers and “volume products” like PCs, notebook and printers to resellers, who then retail it to end users.

ECS also provides services such as channel development and management and logistics to their resellers as well as sales support to end users.

Approximately 70% to 80% of the market go through the two-tier distribution (system).

Currently, ECS has a presence in Penang, Pahang, Sabah, Sarawak, Johor and Selangor.

The company’s purpose-built 40,000 sq ft flagship warehouse is located in Kota Damansara, Petaling Jaya, generating daily sales of RM4mil to RM5mil.

The company’s growth strategy is to enhance its distribution infrastructure and to expand outside the Klang Valley, while also aiming for higher margins in the enterprise systems market.

At present, ECS plans to focus only on the Malaysian market, as there is a “huge potential here as the IT market continues to grow.
ECS ICT Bhd’s holding company is ECS Holdings Ltd of Singapore, which was listed on the SGX main board in 2001.

ECS Holdings turned in revenue exceeding S$3bil in 2008.

The ECS group has a presence in six countries in the region, namely Malaysia, Singapore, Thailand, China, Indonesia and the Philippines.