E-wallet licence holder XOX Bhd will provide RM1 billion in micro-financing to small business owners and entrepreneurs, says the New Straits Times (NST).
XOX has signed a partnership agreement with Wetek Technology (M) Sdn Bhd, whose directors are Liang Zeng and Howard Leung.
Liang Zeng and Leung are no ordinary individuals.
Leung is the chairman and CEO of Brilliant (Hong Kong) Holdings Ltd and he looks after the overall strategic and international business development for the company. Leung has an eye of identifying market opportunities across the globe and the fact that he narrowed down to XOX to partner with shows his confidence in the Bursa Malaysia-listed company.
The other director of Wetek is Liang Zeng, who is an internet entrepreneur and venture capitalist.
Liang Zeng invests and incubates the companies in digital marketing, artificial intelligence and enterprise services.
He has held senior positions as senior vice-president (VP) of Kingdee International Software Group, VP of Microsoft Greater China, and most recently, VP of Baidu Inc. and chief executive officer of Baidu Nuomi.
Currently, he serves as board director and strategic advisor for multiple digital marketing and technology companies.
Just reading about these two individuals, it shows Wetek has strong financial backing and credentials.
Interestingly, Wetek has committed RM1 billion for the micro-financing deal with XOX and both the companies may issue a second tranche after the successful take-up of the initial RM1 billion.
Micro-finance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. The business in Malaysia is growing in this segment as the regular banks are not lending or making it harder for SMEs to get financing for expansion.
The NST qouted XOX CEO Ng Kok Heng stating that the company is moving into this direction to provide entrepreneurs and small business owners access to capital and expand their business. No other Bursa-listed companies have undertaken this initiative and this makes XOX a true hero in the eyes of investors.
XOX will ride on its 2.2 million customer base for the business and we do know the customer base is growing everyday thanks to the wonderful plans launched by XOX to help customers through this current challenging times.
XOX had a year ago proposed a rights issue with free warrants to raise up to RM66 million to fund its e-wallet and electronic SIM (e-SIM) businesses expansion. The company had allocated RM33 million of the proceeds raised from the rights issue to expand its e-wallet function by developing a new mobile application to support micropayments, the issuance of Mastercards and peer-to-peer e-money transfers. Some RM15 million was set aside for its e-SIM expansion as an alternative to the traditional SIM cards.
We can expect XOX’s bottomline to improve with this micro financing deal with Wetek, in which it has a 40 per cent share.
A 40 per cent share in the business is good enough for XOX to register a profit in its current financial year ending September, 30 2020.
XOX rose to its highest in four years today to 12.5 sen with 622 million shares traded.
In fact the stock has been gaining momentum in the last 2 to 3 months as the number of subscribers have increased coupled with several deals the company had announced this year.
We can expect the stock to trade higher tomorrow on this RM1 billion deal
Sharing is caring