Friday, 24 February 2012
IPO ... MOL
MOL created vibes when the people got to know of the windfall the company, and its major shareholder Tan Sri Vincent Tan, stands to make from the listing of Facebook. But despite the vast amount of money MOL will get when Facebook shares are publicly traded, MOL did not rest idly waiting to cash out from it's prized investment.
It leveraged off Friendster, which it bought in 2009, by not continuing solely on its social networking business but one that gets people transacting on its website. After getting privatised in 2008 by Tan, the company has been on a rapid expansion into countries in the region, making its presence not only known across the causeway in Singapore, but also Thailand, India, the Philippines, and Indonesia.
Its revenue has climbed steadily and by financial year ended June 30, 2011, MOL recorded RM465.3mil in revenue, a 24% increase from a year ago. While revenue for its first half ended Dec 31, 2011 climbed to RM352mil, almost matching the RM374mil in revenue it achieved for 2010, and is on course to achieve its full-year revenue target of RM750mil this year, deriving its revenue mainly from mobile reloads, online games and social payments.
It is eyeing avenues in e-commerce and physical non-cash payments as its next phase of growth. The company ambitious plans are to potentially become a regional online social gaming portal and potentially re-listing the company.
It is looking at a listing early 2013.
The rationale for listing would not be so much for capital raising but to raise the profile of the company, and allow the public to share the company's growth story.
MOL's a small stake in Facebook currently is valued at about RM450mil. It got those shares in exchange for selling off some patents it owns in Friendster, the pioneer social networking site MOL bought for US$39mil in 2008, to Facebook.
The revamped Friendster has become a social gaming website. MOL has provided a platform for game publishers to promote their wares but also leverages on its payment system to provide users and publishers a medium to transact. Now, MOL has collaborations with over 140 game publishers including big names like Electronic Arts and Zynga.
The company achieved RM135.3mil in social gaming revenue for its financial year ended June 30, 2011, a 93% increase in revenue compared to 2010, and will be targeting to hit the RM300mil mark for its financial year ending June 30, 2012.
Despite having a clear direction for the company's future, analysts are questiong the viability of MOL's business model. Acting as a medium for games and users, what will happen if the popularity of the games die down. Although MOL might look strong right now (Feb 2012) with the Facebook shares as a core asset, investors still need to delve deeper into the books of MOL to scrutinise its financial standing.
Its next phase of growth would be in the digital payment collection area particularly e-commerce and social shopping.
The company is currently regulated by Bank Negara after getting approval in 2002 as an e-money operator for its core product, MOLPoints, the online micropayment service.