[Redtone (0032) -Details of AGM]

Company size:

• Over 333 employees, 50% of whom are engineers, and approximately 200 engineers and technicians.
• The company is the number one WIFI builder in Malaysia.
• The company has more than 15,000 customers.

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Business Areas:
1) Telecommunication Services

• Provide services on Broadband Internet, service management and Voice
• Revenue is sustainable, giving the company a solid income

2) Managed Telecommunication Network Service (MTNS)

• Conduct large-scale WIFI facilities, telecommunications projects, etc.
• Revenue depends on the contract in hand and it is the company's largest source of revenue

3) Industry digital services

• Provide business on cloud, data center, IoT, etc. Currently doing business such as Smart Farming and VR technology.
• It can help the company to go abroad, although the current revenue contribution is small, but high profits.

✅ Company News Update
The company (2 years ago) has won an engineering contract from the Malaysian Communications and Multimedia Commission (MCMC) to help build network facilities in rural areas. The engineering contract takes 3 to 5 years to complete. (About 70% completed)

The company won a RM 130 mil medical software engineering contract in Sri Lanka.

The company is bidding on the government's total value of RM21.6 bil for Fiber Opticization Program (NFCP). The government needs to build 500 mobile infrastructures in rural areas. This is Redtone's strength and it is believed that some jobs can be obtained.

Redtone is attacking 2 new markets-VR technology and smart farms.

✅ VR technology

• Applications in many industries including industry show room, retail, education, restaurant, etc.

example:
The real estate industry originally needed to build 4 show rooms. With VR technology, only one was needed. Buyers did not need to visit there in person, which greatly reduced the time and cost of both parties.

Consumers do not need to go to the mall in person for online shopping or shopping. Through VR technology, they can clearly see the product's appearance and three-dimensional appearance at home. The seller does not need to open a physical store, while saving the cost of the seller and the buyer ’s time.

✅ Smart Farm

• It mainly uses sensors, connection systems, robots and other technologies to grow crops, which greatly saves costs and increases yield. Based on available data, this technology can increase production by 20%. This can attract young people to agriculture and reduce the problem of lack of heirs to agriculture.

Q&A Time:
✅ Q: I believe 5G is the next catalyst for the telecommunications industry. How does Redtone benefit?

A: 5G means many business opportunities. By then there will be greater coverage and the need for more network infrastructure. These are good for Redtone and it can increase our customer base.

✅ Q: How much money does the company plan to spend to prepare for expansion?

A: Since our business is building facilities for government and mobile phone operators, this does not require much capital to expand.

✅ Q: If the company does not have a contract, does it mean that the MTNS business on behalf of the company has no income?

A: Although the MTNS business depends on contracts to earn income, we also charge maintenance fees, so there will be at least a profit of RM 30mil to RM 50 mil every year. This number will only increase if a new contract is obtained.

✅ Q: Can you explain why the company's accounts receivable over 121 days are so high without impairment?

A: Most of our customers are entrepreneurs, and one of the largest customers is MCMC. The government usually takes a long time to pay.

✅ Q: Currently Redtone is still in Ace Market. Does the company plan to list it on the Main Board?

A: We will plan it in the future.

After attending the REDTONE shareholders meeting, we can feel that the management team knows what they are doing and are confident to lead the company to a higher level. REDTONE's technology seems very amazing, basically all shareholders remain optimistic about the company's future.

At of now, the contract value is RM 250mil, and RM 100mil has been recorded in the account. The previous increase in turnover of REDTONE was mainly due to the 70% completion of the Infrastructure Deployment Phase.

According to the CFO, the deployment phase is usually completed in 3-6 months. Therefore, the remaining 30% will theoretically be recorded in the next quarter.

After that, the company will have stable service charges. These contracts are usually for 3-5 years. This means that the company's business opportunities in the next few years are stable income. We can see that the management team are very eager to lead the company out of Malaysia!

Louis Yap