Cuscapi on the cusp of a strong upward momentum

Share price performance of Cuscapi Bhd has been quite commendable, rising 50% year-to-date to close at 27 sen on Aug 27. Prices also broke out above the downtrend line from the 35 sen high seen in June, supported by a higher trading volume.

Cuscapi is a provider of point-of-sale systems and also owns the Electronic Dealer Management System (EDMS). EDMS is a web-based application which connects vehicle assemblers, distributors, and dealers with government agencies such as Customs and Road Transport Department.

Investors’ interest in Cuscapi could stem from its blockchain business. The digital business solutions provider said in May that the Securities Commission Malaysia has approved its associate company MX Global Sdn Bhd to facilitate the trading of the Worldcoin (WLD) token on digital asset exchanges.

WLD will now be included on the list of permitted digital assets to be traded along with bitcoin (BTC), bitcoin cash (BCH), Cardano (ADA), among others. In March 2022, MX Global said it had secured an undisclosed equity investment from cryptocurrency exchange Binance, while Cuscapi invested RM9 million to subscribe for its redeemable convertible preference shares.

WLD is an iris biometric cryptocurrency project developed by Tools of Humanity. It encourages people to have their irises scanned by its "orb" devices, in exchange for a digital ID and free WLD tokens.

WLD provide a reliable way to authenticate humans online using World ID, to counter bots and fake virtual identities facilitated by artificial intelligence. More than five million people in 120 countries have signed up, according to WLD's website.

Cuscapi posted revenue of RM 28.4 mil and pre-tax profit of RM 2.16 mil during the current financial period 2023. Higher revenue during the financial period is mainly from the trading of digital assets. The company registered a revenue of RM24.59 million and a profit before taxation of RM8.92 million in current year-to-date.

For the current year quarter, the revenue is recorded at RM17.21 million with a profit before taxation of RM4.83 million. The revenue contribution for the current year to date and the current financial quarter mainly arose from the software sales.

No comparative financial information will be available for the previous year due to the Group changing its financial year-end from 30 June to 31 December

In February, Cuscapi saw the emergence of two new substantial shareholders, after they each acquired over 7% stakes in the point-of-sale systems provider. Datin Seri Lee Lan Moi bought 67.5 million shares, or a 7.14% stake. The block of shares was transacted at 2.5 sen per share, according to Bloomberg, for RM1.69 million. Meanwhile, Jessie Lim also bought 68.2 million shares or a 7.22% stake.

Coincidentally, Hillcove Sdn Bhd sold some 65.7 million shares, or a 6.95% stake, having bought into Cuscapi less than three months back in December 2023.