Yi-Lai secures resounding shareholders’ approval for blockchain business

Yi-Lai Bhd has received shareholders nod to venture into the business of blockchain technology solutions and system integration services. NSTP/EMAIL

KUALA LUMPUR: Yi-Lai Bhd has received shareholders nod for its diversification into information technology (IT) solutions.

As it’s new long-term growth engine, Yi-Lai will venture into the business of blockchain technology solutions and system integration services.

This is pursuant to the joint venture agreement signed with TechBase Solution Sdn Bhd (TSSB) announced on 8 September 2020.

Both Yi-Lai and TSSB intend to set up a separate joint venture (JV) corporation, namely, TechBase System Sdn Bhd (TBS), to run the new business.

Yi-Lai will hold 49 per cent stake in TBS, while TSSB will hold the remaining 51 per cent of the equity.

Under the JV, Yi-Lai will provide funding up to RM9.5 million to meet the financing requirements of the new blockchain business, whereas TSSB will provide equipment and software, technical know-how and technical assistance.

TSSB has approximately 11 years of experience in providing IT solutions and offers products ranging from enterprise resource planning (ERP) solutions, sales management systems, business productivity solutions and website design and development.

It’s target clients are small and medium enterprises or large corporations, as well as organisations that need to upgrade or replace existing IT systems.

TSSB has a strong recurring income base from its after-sale maintenance services and ad-hoc support.

Yi-Lai newly-appointed executive sirector Au Yee Boon said with the approval for the diversification, the group’s potential will be fully tapped and it’s capabilities will be demonstrated in the IT industry.

“This is a transformational venture for Yi-Lai, which presents a strong and stable alternative income stream to the group. This is also part of our strategies to mitigate our sole reliance on the existing tiles manufacturing business,” he said.

Au said the group had recorded losses for the past 3 financial years, and it is imperative for the new management to implement a solid business strategy to turnaround the company.

“We have strong confidence that this timely opportunity will yield sustainable earnings to Yi-Lai over the medium- to-long term.

“Besides that, since the revamp of the management team in August 2020, the board has put in place a series of business strategies, which focus on introducing products that are aligned with customer buying behaviour, optimising business model for better accountability, simplifying operations and improving cost-efficiency.

“With these in place, we are fairly confident that the group would turnaround in its financial year ending 31 December 2020 (FY20), underpinned by improved financial performance of both of its business segments,” Au said.

Moving beyond FY20, Au expressed his optimism that the improved momentum will accelerate as the business strategies yield stronger results.

Recently re-designated non-independent non-executive director Aaron Tan Jian Hong said Au’s extensive experience in the regional IT industry and his strategic leadership will be an invaluable addition to the business.

“I look forward to seeing him spearhead Yi-Lai’s commitment in maximising shareholders’ value and realising its full potential,” Aaron said.

Aaron is the son of Tony Tan @ Choon Keat, and a nephew of Datuk Seri Robert Tan Chung Meng, both of whom are the directors and major shareholders of IGB Corporation Bhd.

AAron is also the director of Wah Seong Corporation Bhd.

Au, who is also the single largest shareholder of TSSB, said with the necessary funds in place, Yi-Lai is taking a step closer in achieving its objectives to expand its presence geographically and to become a regional player in the rapidly-growing IT sector.

“Going forward, we intend to appoint the new entity TBS as the exclusive distributor for TSSB’s ERP solutions to international markets,” Au said.

Source: https://www.nst.com.my/business/2020/10/636644/yi-lai-secures-resounding-shareholders-approval-blockchain-business