Sign up United Kingdom
Proactive Investors - Run By Investors For Investors
Why invest in IS3?

I Synergy Group expands retail presence ahead of improving 2018 performance

The group’s ability to provide benefits to the retail sector was demonstrated in 2017.
Picture of Malaysian city
Benefits from the investment in Smart$ will have a material impact on the group’s fiscal 2018 performance

I Synergy Group Limited (ASX:IS3) listed on the ASX in March 2017 with an IPO price of 20 cents.

The company is one of Malaysia’s leading affiliate marketing network and solutions providers, connecting advertisers through its marketing platform.

However, it also branched out into other areas in the latter half of 2017 and these initiatives should begin to gain traction in 2018.

Possible entry into Australia

In particular, the company’s focus on the retail sector should begin to pay dividends and non-executive chairman Bruce Symon recently pointed to this strategy.

He said: “The group’s future will see a continuing focus to invest in more retail opportunities, further expanding its geographical presence and brand awareness.

"Additionally, we are assessing opportunities to accelerate growth with a number of additional growth and acquisition-focused initiatives in Australia.

"This will further diversify revenue and have the potential to increase shareholder value, whilst adding a strategic platform and geographic penetration to Affiliate Junction.”

Affiliate Junction addresses diversified market

The affiliate marketing platform is called Affiliate Junction.

Under the platform, there are a variety of affiliate programs available which cater to various industries and markets.

This assists in providing marketing solutions that enhance product and brand awareness as well as in driving business leads.

The Affiliate Junction platform is home to more than 25,000 affiliates and 1,000 advertisers.

Under the platform, there are a variety of affiliate programs available which cater to various industries and end markets.

Recovering from challenges in 2017

The last 12 months has presented its challenges but for the most part, the company’s share price has remained resilient.

This underlines the importance of the operational initiatives taken in 2017 and these arguably need to be the focus in examining the business.

These included product launches and the establishment of commercial relationships.

Foreign exchange impact

It is worth noting that there was a non-operational factor at play for the majority of the trading period between when the company listed and December 31, 2017, the end of its financial year.

In 2017, the group’s functional currency, Malaysian Ringgit (MYR), depreciated substantially against the reporting currency, Australian Dollars (AUD).

This placed downward pressure on revenues and given the extent of the decline as shown in the chart below, the currency impact was material.

While it can be seen that the downward momentum has been maintained in 2018 the relative MYR:AUD decline is significantly less than experienced in 2017.

It can also be seen that the rate is currently broadly in line with where levels of support were encountered when there was a sharp retracement in 2016.

Key operational developments

I Synergy’s financial performance should be viewed in the context of the extensive investment made in its operations in the Indonesian market.

In 2017, the company launched its first retail loyalty affiliate program in Indonesia, called Smart$

This facilitated the group’s unique brand of retail affiliate marketing solution offerings to benefit the nation’s retail community and Indonesian affiliates.

There was significant investment in the development of the program’s website and portal as well as in its marketing initiatives.

Benefits from this investment will have a material impact on the group’s fiscal 2018 performance.

Retail focus

I Synergy intends to invest in more competitive projects, expanding into new categories and markets.

The group’s ability to provide benefits to the retail sector was demonstrated in 2017.

The retail affiliate program MyKad Smart Shopper (MSS) generated a total of RM 6.5 million (A$1.95 million) in sales for Mydin Mohamed Holdings Berhad (MYDIN) as of September 30, 2017.

MYDIN is one of Malaysia’s leading chains of hypermarket, supermarket and emporiums with more than 300 outlets operating nationwide.

MYDIN became an MSS advertiser in June 2017, enabling its members to enjoy the affiliate program’s retail benefits when shopping at any of MYDIN’s 12 participating outlets.

MSS is a retail affiliate program powered by Affiliate Junction.

The collaboration has been a success with the sales generated by MSS steadily increasing at an average rate of 120% monthly over the past four months for MYDIN.

View full IS3 profile View Profile

I Synergy Group Ltd Timeline

October 08 2018

Related Articles

picture of trading screens
July 12 2018
With an optimistic outlook on future earnings, the company expects to recommend its first dividend in the second half of the current financial year.
ROBO Global US CEO Travis Briggs
August 14 2018
Investors can buy directly into the popular ROBO ETF based on the benchmark index comprised of 87 top robotics, automation and AI companies.
Data servers
July 31 2018
The company is expected to list on the main board of the LSE in September

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use