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Rexit to become major IT exporter
- By Hanis Sayuti
- Published 28 January 2008
- MSC Malaysia Status
- Unrated
By: C. S. TAN
Source: The Star Online
PETALING JAYA: Rexit Bhd is poised to become a leading exporter of information technology (IT) services after it secured large regional contracts, with more expected in the future.
It made a triple-step jump last week when it announced three contracts.
First, it announced on Monday that unit Rexit International Sdn Bhd had signed an agreement for Sompo Japan's insurance business to be processed electronically through Rexit's e-Cover portal on the Internet.
On Thursday, the company said Rexit International was informed by Sompo's subsidiary in Hong Kong to provide it with e-Cover services. On the same day, Rexit said it entered into agreements with 16 insurers in Malaysia for a scheme involving contributors to the Employees Provident Fund.
Rexit chief executive officer Chung Hon Cheong said the agreement with Sompo Japan stated all the terms and premium rates.
The agreement facilitates the outsourcing of work to Rexit International by Sompo Japan and all its subsidiaries in other countries.
“It is the most significant agreement we've got. With the master agreement, it will need just a short letter from any of their units to outsource work to us. There's no need for any subsequent agreement,” Chung told StarBiz.
Hence, when Sompo's Hong Kong unit decided to appoint Rexit International to provide e-Cover services for all its insurance operations, it just issued a short letter of confirmation.
“With the master agreement signed with Sompo Japan, now it's just the speed of implementation for the group,'' Chung said.
Sompo Hong Kong is the second operating contract from the Sompo group for Rexit. The first was from Sompo Japan itself which, together with the master agreement on Monday, appointed Rexit International to provide e-Cover services for its foreign marine cargo insurance business.
“That's how it's worded in the contract, but 'foreign marine' refers to Sompo group's global marine cargo insurance, including Japan,” Chung said. That opens opportunities for Rexit to provide similar services for other classes of insurance for Sompo Japan.
Sompo is Japan's second largest non-life insurance company with net premiums of about RM42bil last year.
Rexit's business model involves a pay-per-use or revenue sharing arrangement. It does not make any outright sales of its software.
Chung pointed out, however, that for the next 18 months, Rexit would not receive any revenue from the Sompo contracts.
“We're building a toll road. Our profits during this period could even drop a bit because we incur expenses but do not get the revenue yet. But once the toll road opens, we'll be a very different company,” he said.
Rexit should see revenue from Sompo Japan gushing in from the second half of next year, with a full-year's impact in 2010.
Hence, a local brokerage forecast Rexit to earn a net profit of about RM97mil for its financial year ending June 30, 2010, or 10 times its net profit of RM9.2mil in fiscal 2007.
In the meantime, Chung is glad that revenue from domestic contracts will help cushion the expenses in modifying the software for Sompo.
He does not expect any execution risk. “Sompo executives have tested our software and drilled us in the last 12 months,'' he said.
It was tough selling to the Japanese, he added, as Malaysia was not considered a technologically advanced country. Notwithstanding that, Rexit sealed the deal with Sompo.
“That has given us credibility, and it's a jackpot of a contract,” Chung said.
Source: The Star Online
PETALING JAYA: Rexit Bhd is poised to become a leading exporter of information technology (IT) services after it secured large regional contracts, with more expected in the future.
It made a triple-step jump last week when it announced three contracts.
First, it announced on Monday that unit Rexit International Sdn Bhd had signed an agreement for Sompo Japan's insurance business to be processed electronically through Rexit's e-Cover portal on the Internet.
On Thursday, the company said Rexit International was informed by Sompo's subsidiary in Hong Kong to provide it with e-Cover services. On the same day, Rexit said it entered into agreements with 16 insurers in Malaysia for a scheme involving contributors to the Employees Provident Fund.
Rexit chief executive officer Chung Hon Cheong said the agreement with Sompo Japan stated all the terms and premium rates.
The agreement facilitates the outsourcing of work to Rexit International by Sompo Japan and all its subsidiaries in other countries.
“It is the most significant agreement we've got. With the master agreement, it will need just a short letter from any of their units to outsource work to us. There's no need for any subsequent agreement,” Chung told StarBiz.
Hence, when Sompo's Hong Kong unit decided to appoint Rexit International to provide e-Cover services for all its insurance operations, it just issued a short letter of confirmation.
“With the master agreement signed with Sompo Japan, now it's just the speed of implementation for the group,'' Chung said.
Sompo Hong Kong is the second operating contract from the Sompo group for Rexit. The first was from Sompo Japan itself which, together with the master agreement on Monday, appointed Rexit International to provide e-Cover services for its foreign marine cargo insurance business.
“That's how it's worded in the contract, but 'foreign marine' refers to Sompo group's global marine cargo insurance, including Japan,” Chung said. That opens opportunities for Rexit to provide similar services for other classes of insurance for Sompo Japan.
Sompo is Japan's second largest non-life insurance company with net premiums of about RM42bil last year.
Rexit's business model involves a pay-per-use or revenue sharing arrangement. It does not make any outright sales of its software.
Chung pointed out, however, that for the next 18 months, Rexit would not receive any revenue from the Sompo contracts.
“We're building a toll road. Our profits during this period could even drop a bit because we incur expenses but do not get the revenue yet. But once the toll road opens, we'll be a very different company,” he said.
Rexit should see revenue from Sompo Japan gushing in from the second half of next year, with a full-year's impact in 2010.
Hence, a local brokerage forecast Rexit to earn a net profit of about RM97mil for its financial year ending June 30, 2010, or 10 times its net profit of RM9.2mil in fiscal 2007.
In the meantime, Chung is glad that revenue from domestic contracts will help cushion the expenses in modifying the software for Sompo.
He does not expect any execution risk. “Sompo executives have tested our software and drilled us in the last 12 months,'' he said.
It was tough selling to the Japanese, he added, as Malaysia was not considered a technologically advanced country. Notwithstanding that, Rexit sealed the deal with Sompo.
“That has given us credibility, and it's a jackpot of a contract,” Chung said.
