AIAB sees revenue growth on gold demand

KUALA LUMPUR: ACE Innovate Asia Bhd (AIAB), which made its debut on the LEAP Market of Bursa Malaysia yesterday, expects demand for its gold products to pick up this year amid uncertainties.

At the opening bell, AIAB shares rose to 27 sen with 500 units traded, marking a 3.85% premium over their offer price of 26 sen. The counter closed the day at 33 sen, up 26.92% or seven sen, with a market capitalisation of RM99.01 million. A total of 28,000 shares changed hands.

Uncertainties arising from heightened geopolitical tensions in the Middle East, coupled with unpredictability surrounding the Sino-US phase one trade deal and the US presidential election this year, have buoyed demand for gold as a safe haven.

AIAB executive director cum chief executive officer Go Yoong Chang expects the group to benefit from the gold market’s volatility, with a double-digit growth in revenue in the near future on the back of increased trading volume for gold products.

He said the gold price is expected to fluctuate between US$1,300 (RM5,330) and US$1,680 per ounce this year, hinging on the global uncertainties.

“I think there will be interesting gold price[s] for this year,” Go told a press conference after the group’s debut on Bursa Malaysia. “We think when the time [draws] near to the US election, gold prices will move a fair bit.”

He added: “Whenever there is a spike or downward trend in gold price, to us it is a fluctuation. That actually benefits us in terms of volume. When there is a fluctuation, people tend to buy or sell more rather than when the market is sideways. When the market is sideways, we tend to have quieter, smaller volumes.”

Bloomberg data showed spot gold price rose 0.11% or US$1.78 to  US$1,567.52 per ounce yesterday. Over the past one year, the price of gold has been trading in the range of US$1,266.35 to US$1,588.13.

In terms of market share, Go said AIAB is among the top three players in the bullion trading industry, and its ultimate goal is to establish itself as the market leader.

The confidence to grow its market share also stemmed from the introduction of its in-house gold trading platform — GTP Easy — which allows direct connection between the group and its customers and suppliers, by providing updates on live gold prices and trading features.

In 2018, the group saw its revenue surge 92.54% to RM1.09 billion, from RM565.47 million in 2017. Net profit rose 10.47% year-on-year to RM4.75 million for 2018 from RM4.3 million, according to AIAB’s listing information memorandum.

The group accounted for 8.8% of the Malaysian bullion trading industry’s RM12.4 billion estimated revenue in 2018.

The initial public offering saw the group placing out 39 million shares to raise RM10.14 million.