Netccentric Stirs Investor Interest, Why So?

Netccentric

If there is one company that has really captured the imagination of the Australian investing community, it is that of Netccentric Ltd. (ASX:NCL), a Malaysian company publicly-listed company on the Australian Securities Exchange (ASX) and spearheaded by a tech icon known as ‘the Bill Gates of Malaysia’.

Earlier this month, investors chased the stock up to a two-year high of 0.13 cents, before profit-taking set in with the stock settle around the 0.071 cents mark lately. Last calendar year, the stock mainly hoovered around the 0.005 cents range.


In Stockhead’s report entitled “Who’s getting into the Christmas spirit” (published on 2 December 2020), the investment portal stated: “The top gainer in ASX Tuesday trade was Netccentric (ASX:NCL) which surged more than 63 per cent without any fresh news.”

“Investors appeared to like the social media marketing company’s purchase of business partner Docono Holdings’ shares in Asian markets blogging network, Nuffnang Live Commerce. Netccentric is now the largest shareholder at 57 per cent in Nuffnang Live Commerce a social commerce platform,” it said.

“The company published an investor presentation on Monday mapping out its growth strategy in Asia’s digital marketing sector. Netccentric has 300 clients and 13,000 social media influencers in countries including, Singapore, Taiwan and Malaysia. The presentation said the Asia-Pacific market is set to become the world’s largest for social media marketing by 2024,” added the report.

Henceforth, what exactly is Netccentric and who is this “Bill Gates of Malaysia”, as even the Malaysia’s oldest newspaper The New Straits Times has labelled him, and whom an industry observer described as “Malaysia’s man with the Midas Touch”?

Just who is this ‘Bill Gates of Malaysia’ and his team of expert professionals?

Born and named Ganesh Kumar Bangah, the Netccentric executive chairman made history in his home country by becoming its youngest CEO of a public listed company at 23 in 20003, a fact testified by the Malaysia Book of Records.  Through a series of acquisitions all over the world, he then built an online payment gateway group and Southeast Asia’s first internet company to be listed on the NASDAQ market of the United States in 2014. Today, Ganesh also owns e-commerce ecosystem builder Commerce.Asia which he had founded in 2016. He was also recognised as EY’s Entrepreneur of the Year in 2012.

At Netccentric, Ganesh is accompanied by a powerful and distinguished Board of Directors. They include independent non-executive director Joanne Khoo, who has more than 23 years of experience in corporate finance and business advisory services.

Australians are also onboard, too. Independent non-executive directors Darren Cooper and Robert Sultan are highly experienced leaders within the Australian corporate scene.

With over 25 years senior and executive management experience, Darren is currently managing director of a private consulting business, board chairperson of The Go2 People Ltd and Spectur Ltd and deputy board chairperson of Foundation Housing Ltd. He is also non-executive director of JDSi Consulting Engineers Pty Ltd and Ocean Gardens Retirement Village Inc.

Robert, meanwhile, is a corporate and commercial lawyer as well as former partner of international law firm, Norton Rose Fulbright Australia, with a 30-year portfolio in merger and acquisitions (M&A), corporate advisory and corporate governance. A former member of the Australian Takeovers Panel, Robert is also currently a director of the Gourlay Family Office which includes the Gourlay Family Trust. The Trust, in conjunction with Trinity College Melbourne, had established the Gourlay Visiting Professor of Ethics in Business.

Meanwhile, Ganesh’s management team is rounded out by COO Joanne Chen, a season advertising professional with over 20 years of senior and executive-level management experience in the digital industry who pioneered the setup of Malaysia’s first digital media agency; CFO Angeline Chiam, who has been with the Netccentric Group since 2010 and who led the core finance team in Netccentric’s ASX listing; and CTO Daniel Wong, Head of Software Engineering at MOL Global with over 18 years of experience in financial technology, e-commerce, and solution integration.

Introducing ‘Asia’s Pioneering Digital Growth Ecosystem’

Incorporated in 2006, Netccentric launched its flagship brand Nuffnang in 2007.

Nuffnang, widely regarded as one of Asia’s leading blogging networks, was initially launched in Malaysia and Singapore, expanding into other countries from 2008-2012. In 2013, the company launched social media agency Sashimi and its video production/creative arm RTV.

Netccentric was subsequently listed on the ASX in 2015, raising AUD12.5 million. It expanded into performance marketing through the acquisition of Plata & Punta in 2017, and in 2018, it launched Crunch, Nuffnang’s community-driven content platform and event management arm.

The Netccentric Group, which bills itself as “Asia’s Pioneering Digital Growth Ecosystem”, has attracted investors’ attention as a result of its profitable nature, with positive operational cash flow as well as earnings before interest and tax (EBIT). Additionally, the company is not encumbered by any debt.

Capitalising on its core business, which is the provision of social media influencer marketing solutions to its clients throughout Asia, it has seen profitability grow by 10% year-on-year in Q3 2020.

Netccentric offers end-to-end expertise across its fields of operation, spanning influencer marketing (via Nuffnang), social media marketing (via Sashimi/Dejitaru), performance marketing (via Plata & Punta), video and content creation, and social commerce (via Nuffnang Live). The company uses data and insights to grow its diversified revenue streams by empowering communities with innovative digital platforms. Its over 300 clients include various blue-chip brands such as Panasonic, Suzuki, Unilever, and Nestle.

Its flagship brand, Nuffnang, contributed 60% of Netccentric’s total revenue in the first half of 2020, a revenue growth of 34% as compared with the same period in 2019. Meanwhile, Sashimi/Dejitaru brought in 24%, with Plata & Punta contributing 12%, and another 4% coming in from other sources.

The company is poised to capitalise on its first-mover advantage within the region, given that the size of the global influencer platform market is expected to grow to US$22.3 billion by 2024, a CAGR of 32.4% since 2019, with Asia Pacific becoming the world’s largest influencer marketing platform market by that time.

Of influencers, key opinion leaders, celebrities and content creators

Its flagship influencer marketing platform, Nuffnang, connects Netccentric’s clients to more than 13,000 influencers, key opinion leaders, celebrities, and content creators, who collectively reach over 20 million engaged social media followed throughout Southeast Asia, making it the largest social media influencer community in Asia. Nuffnang’s services include influencer engagement, brand ambassadorship, and brand advocacy programmes.

Nuffnang’s success derives from several factors, including its deep experience, having launched thousands of influencer and content campaigns and produced award-winning YouTube online videos.

It is the only company of its kind to use sophisticated analysis tools for campaign planning and reporting. In addition, it provides idea-driven solutions, integrating influencers, video, design, and content to leverage the full Netccentric growth ecosystem.

The fusion of e-commerce and livestreaming, creating positive ‘network effect’

More recently, in 2020, Netccentric entered into a joint venture with e-commerce infrastructure provider Commerce.Asia, creating Nuffnang Live Commerce. The joint venture fuses e-commerce with livestreaming to create a positive ‘network effect’, showcasing influencers who promote products and services, and turning the engagement between influencers and their followers into sales and revenue.

Through the new Nuffnang Live Commerce, Netccentric provides its clients an end-to-end, fully-integrated and seamless live video commerce solution from live video production through to payment and fulfilment.

Its services includes Nuffnang Live Pro, a SaaS platform that automates the sales process for current live commerce sellers; Nuffnang Live Business, a one-stop solution; and Nuffnang Live Marketplace, a platform linking current live commerce sellers to product owners. Netccentric expects this industry to grow exponentially in the years ahead.

Rounding out its end-to-end marketing platform is Netccentric’s other brands, including its full-service digital agency Sashimi, which provides clients with holistic digital marketing solutions on Web and mobile platforms; and Plata & Punta, through which the company provides digital performance marketing services.

Additionally, Netccentric offers research and data analytics, social media management, digital campaign management, content development, consultation, paid media and digital PR, Web/app development, and design services.

New growth drivers

Moving forwards, the company continues to pursue the fast-growing influencer market opportunity as it develops new growth drivers through expansion into the SME (small and medium enterprises) segment and the social commerce market.

In particular, Netccentric invests into automation in order to ensure its scalability, powering its planned expansion into social commerce and the SME market, as well as actively explores a number of potential M&A opportunities, particularly in the consumer community space.

The Netccentric presentation concludes with the following ‘investment highlights’:

  • Trusted by established brands and leading agencies, recognised by media and industry
  • Profitable and growing core business, operating within the fast-growing influencer marketing industry, cashflow self-sufficient with comfortable cash reserves
  • Led by a committed and visionary entrepreneur with an experienced Board supported by a management team with a proven track record
  • A complete business growth ecosystem providing proven end-to-end solutions for effective go-to-market, from creating awareness and generating engagement through to optimising revenue
  • New investments into Automation & Social Commerce offer potential to deliver scalable growth, and
  • First mover advantage and barrier to entry secured through a large social media influencer community in Asia.

To view its investor presentation, please click on: https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02315427-2A1266720?access_token=83ff96335c2d45a094df02a206a39ff4  

Note: This is an opinion only and not a recommendation to buy or sell stocks. Please consult your stockbroker or financial advisor before making any purchasing decisions.