TREK 2000: 8 ½ questions with management

Excerpts from Phillip Securities Research report

8 and a half? We posed eight questions to senior management about their company and industry, plus another question just for fun. We do not have a rating on this stock.

Q1: What are the biggest challenges of running an R&D-focused company?

A: Two of our biggest challenges lie in staying ahead of a fast-changing technology industry while protecting our intellectual property rights.

As the inventor of the ThumbDrive and Flucard, we are commited to our mission of becoming a leading innovator of the Internet of Things. At the same time, growing a commercially viable patent portfolio is essential to differentiate the company from its competitors in terms of branding and protect a significant revenue stream.

Q2: What are the lessons learned from your experience launching the ThumbDrive?

A: Our single biggest mistake was introducing the ThumbDrive while its patent was still pending. We have since learned the importance of protecting our IP. We currently own a portfolio of more than 400 granted patents worldwide. We partnered with Toshiba to better safeguard our IP portfolio and help enforce our rights against any possible infringements.

As a mark of recognition for our inventions such as our proprietary Flucard, we were also appointed as a Board Director of the SD Card Association and co-chairman of the intelligent SDIO forum alongside founders Panasonic, Toshiba, and Sandisk. Through our involvement in the SD Card Association, we develop and enforce compliance of SD and iSD cards, thus establishing industry benchmarks.

Q3: How do you productise a particular engineering concept?

A: Our tagline is ‘Innovation: Inside Out’, which means that we excel in transforming engineering concepts into reality with inventions that enhance people’s lives. For example, we adapted our external storage capabilities to develop the Flucard. We were able to customise and apply additional forms of technologies such as Wi-Fi capabilities, power management, security and encryption by leveraging on our proprietary NAND flash memory storage as the base concept.

We have also been able to realise a whole spectrum of possibilities with our ability to control the functions and versatility of the product,. Before productisation, we also ensure that the relevant IP - be it patents, copyrights or trademarks - are applied to protect our intangible assets.

Q4: What are Trek’s competitive strengths?

A: As an original design solutions provider, we operate under an asset-light business model supported by a strong portfolio of IP. Due to the versatile nature of our Flucard, we continue to see growth within our Interactive Consumer Solutions business as we incorporate the a Wi-Fi memory module into a variety of consumer electronics. In addition, we also look to forge strong partnerships with global MNCs which will deliver short and long term catalysts for the company.

Henn Tan, Chairman & CEO of Trek 2000.
NextInsight file photo. Finally, with a track record of developing disruptive technologies, we have a growing portfolio of patents and trademarks to build recurring income streams while supported by a strong balance sheet to support our R&D initiatives. With a shift in focus to smart devices, we ensure that we stay ahead of the curve by creating the right products for the market.

Q5: What are the developments for the Cloudstringers platform since its soft launch in 2013?

A: Since our soft launch, Cloudstringers not only won the ‘Most Innovative Consumer Solution’ Award at the France-Singapore ICT Awards in June 2013 but also received co-investments by Toshiba and Panasonic in December 2014. In addition, Cloudstringers’ database of professional, public users and enterprises is fast-growing and we currently have more than 30 national broadcasters and 50,000 users. We have also improved the mobile and online interfaces to make them more user-friendly. In the short to mid term, we expect to monetize the platform through transaction fees, the storage of historical content and a freemium model, but as of now we are waiving these fees in order to grow our user base. Moving forward, we expect to leverage on the extensive resources and network of our two partners to further grow our revolutionary platform.

Q 6: What are your growth strategies going forward?

A: Our core ICS business, which includes ThumbDrive, Flucard and Flucard Wi-Fi memory modules, is expected to be the main growth driver for Trek and we will continue to develop innovations within the segment. In addition, we have been prospecting actively for strategic alliances such as our expansion into the growing consumer solid-state drives (SSDs) market through a joint venture with Unimicron to produce SSDs for portable consumer electronics in October 2014.

Lastly, we remain focused on developing our three innovation pillars – wearable, medical and cloud technology – to stay at the forefront of the technology industry. Apart from the introduction of Cloudstringers, we aim to tap on our expertise in R&D to form strategic collaborations with MNCs to develop and commercialise new technologies and inventions within these segments.

Q7: Do you have a fixed dividend policy?

A: While we do not have a fixed dividend policy, we typically strive to reward shareholders for their pledge of support and confidence in us. We continue to assess the prevailing market conditions and ensure that our balance sheet is able to support our growth strategy before we decide on the dividend payouts.

Q: How would you describe your management style?
A: We practice ‘management by objectives’ approach, where the end goals of all projects are clearly defined and set by both management and teams involved. This approach enables better communication and delegation between management and employees while working towards the same goal and meeting deadlines. We also dish out productivity awards as an additional form of motivation to the teams and individuals who accomplished their goals.

Q 1/2 : What is your most distinctive childhood memory?

A:   I come from a family with six children and we were very poor growing up. I distinctly remember my mum had to struggle with a stray cat over a fish that was supposed to be the only dish for dinner that day. I will never forget the hardship and abject poverty that we went through and this in itself spurred me in my pursuit of excellence and a better future.