Time & date: 10 am, 24 April 2015.
Venue: Trek 2000's office,
30, Loyang Way.
ONLY a handful of shareholders made the trek to the company's office in Loyang but they were rewarded with interesting insights, particularly because of a Powerpoint presentation after the AGM, into this R&D-centric company's future.
To kick off the Q&A session, a shareholder asked about the contracts that Trek had won last year and this year to supply its proprietary wi-fi memory modules to US toymaker Rely/Mattel.
These modules, which are manufactured out of third-party factories in Batam, Malaysia and Taiwan, are based on its FluCard, a memory card with wi-fi capabilities.
The FluCard enables data on a device (such as a digital camera or a video camera) to be transferred wirelessly to the Internet and between FluCard-equipped devices.
It has the potential to displace the use of existing SD cards.
@ AGM: CFO Gurcharan Singh, Chairman & CEO Henn Tan, and Independent Non-executive Director Khor Peng Soon (who chaired the AGM).
Photo by Leong Chan Teik
Q: Can you tell us more about the contracts with Rely/Mattel?
Henn Tan, Chairman & CEO: The first contract of US$25 million was for a specific interactive toy model. After that, we worked with them on a new model which led recently to the award of a US$50 m contract.
Going forward, all toys will become "smart". We are working with them whereby specific content can be transmitted to the cloud.
Khor Peng Soon, Independent Non-Executive Director (and chairman of the AGM): Two key words to note in what the Chairman has said: "smart toys" What Trek has been able to do is to put intelligence and smartness into the toys, and that's how the future is trending to.
I would also comment that Trek is a bit like another famous company in the sense that we are inside products, we are the guts of the toys. You can imagine that our products can go into many other things as well. We are imparting intelligence and, more importantly, connectivity.
Q: Is there any branding for Trek on those products?
Henn Tan: We are an OEM player and have embarked on co-branding. For example, the FluCard found in high-end Pentax cameras carry the names Trek, FluCard and Pentax.
Five years ago, we launched the FluCard. At that time, I was targeting the Internet of Things market as I realised every device will eventually be connected and be part of an intelligent system or systems.
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“A computing concept that describes a future where everyday physical objects will be connected to the Internet and be able to identify themselves to other devices.” – techopedia.com “A proposed development of the Internet in which everyday objects have network connectivity, allowing them to send and receive data.” – Oxford Dictionary “The Internet Of Things will make many of the familiar devices and objects in our lives — from door locks to toll booths to refrigerators — suddenly Internet-connected, smartphone-accessible, and responsive.” – Business Insider |
Khor Peng Soon: I would encourage you to read the annual report. The company has put a lot of effort into producing this report. I urge you to read the chairman's statement -- there is quite a bit on the Internet of Things.
This will give you an idea of the company's future, a bright future, and there will be lots of good things to come.
Q: I agree with you regarding the annual report and this year I see more prospects for the company. On the 2014 accounts, the revenue is $113 million and the cost of sales is $100 million. My concern is, your cost is almost 90% and your net profit is only $3 million.
Henn Tan: Such a situation can vary over time. And we are working towards bringing costs down.
There are market forces at work. If our FluCard can replace SD cards, the whole world is ours but SD card manufacturers are dropping their prices.
It is not one factor but an abundance of factors that contribute to our cost vis-a-vis the selling price.
Khor Peng Soon: Why we have been able to come up with innovation after innovation -- our number of patents is rising -- is because of R&D. There is a cost to our company. But we made nice money last year and the future is brighter. The pace is there and if we can increase the revenue, the impact on net profit will be significant.
