DGB Asia jumps on GST software bandwagon

KUALA LUMPUR: DGB Asia Bhd said its joint venture with Ministry of Finance (MoF)-controlled Rofarez Solutions Sdn Bhd is related to an investment on developing goods and services tax (GST) software, which is expected to bring additional multi-million ringgit profits to the group.
DGB shares rose as much as 2 sen or 16.67% to 14 sen following the announcement of its joint venture with the MOF unit. The counter closed 1sen or 8.33% higher to close at 13 sen yesterday on some 87.15 million shares done, making it the third most-active stock.
Targeted at the oil and gas, healthcare, financial and industrial sectors, DGB managing director Datuk Pang Chow Huat said the biggest advantage of using this new GST software is that it has a direct link to customs.
With that, he said it can reduce the errors caused by the existing manually key-in system as well as reduce manpower of the businesses.
If the deal materializes, he believes the profits contribution from the GST software will be significant as the market is huge.
Pang is hoping the group will enter into a definitive agreement with Rofarez within the next few months.
"We still have a few things to discuss with Rofarez, such as the investment amount and equity structure, there is no conclusion yet," he told SunBiz through a phone interview.
"We have to (act) very fast (in order) to help the government to solve the current problem…Some of the people are using GST to cheat the customers, so we've to avoid this kind of problem, if they use our software, it's possible to solve this problem," he added.
Last Friday, DGB entered into a memorandum of understanding with Rofarez to form a joint venture alliance into the business of distribution, implementation and service of the cloud based business solution products to various business sectors.
Pang said he is confident of its venture with Rofarez considering the substantial stake the MoF owns in Rofarez.
Rofarez is involved in the development and implementation of cloud-based business solution, while DGB is involved in the software engineering business.
DGB, which had been suffering losses over the past few years, has returned to the black for the first quarter ended Dec 31, 2014, registering a net profit of RM139,000 against a net loss of RM538,000 in the previous corresponding period.
The software and engineering business is the main contributor to the group's revenue, followed by radio frequency identification (RFID) and other businesses.