XOX and Wetek Inked RM1 Billion Micro-Financing

XOX and Wetek Inked RM1 Billion Micro-Financing | XOX Bhd was having its day when it was chosen by Wetek Technology (M) Sdn Bhd to micro-financed. XOX's subsidiary, XOX Media Sdn Bhd has inked a partnership agreement with Wetek Technology (M) Sdn Bhd to provide micro-financing to the tune of RM1 billion.

Refer NST [XOX to provide RM1bil micro-financing to individuals, small businesses]

XOX is one of the top e-wallet licence holders in Malaysia. XOX has a strong existing subscriber base of 2.2 million and this could exceed 3 or 4 million this year as the company is growing exponentially. A year ago XOX had proposed a rights issue with free warrants to raise up to RM66 million to fund its e-wallet and electronic SIM (e-SIM) businesses expansion. XOX allocated RM33 million of the proceeds raised from the rights issue to expand its e-wallet function by developing a new mobile application to support micro-payments, the issuance of Mastercards and peer-to-peer e-money transfers.

 

Some RM15 million was set aside for its e-SIM expansion as an alternative to the traditional SIM cards. After all, XOX's subscribers is growing on a day-to-day basis. While the company has not announced what the count is currently, the subscribers could have exceeded 2.5 million or even 2.8 million. 

"This is a huge opportunity for Wetek to grow in this business. Globally, the microfinance industry had serviced 139.9 million borrowers in 2018, and 65% of microfinance borrowers live in rural areas where traditional banking and lending is difficult or impossible. According to Microfinance Barometer 2019, this industry has been growing at an annual rate of 11.5% over the past few years and projected to reach US$146.8 billion by 2021," Howard Leung Hao, Wetek's director  said. 

Today, the New Straits Times quotes XOX CEO Ng Kok Heng "The company is moving into this direction to provide entrepreneurs and small business owners access to capital and expand their business. The XOX's customer base is expected to double up by the end of this year and in fact has been growing steadily on a daily basis."

The NST also reported that XOX and Wetek may issue a second tranche of financing, provided the initial RM1 billion funding is fully taken up. This is likely to happen given the current situation where entrepreneurs and small business owners are finding it difficult to obtain loans. There will be for sure a high percentage of the XOX subscribers who might take this chance to obtain micro-financing from XOX.

Leung Hao is the chairman and CEO of Brilliant (Hong Kong) Holdings Ltd and looks after the overall strategic and international business development for the company. He is said to have an eye of identifying market opportunities across the globe with experience managing a cross-cultural team of management. He is also a supporter of start-ups as he believes in the opportunity with young people and great ideas. Leung started his career in the 1990s in the IT and mobile internet industry and founded Beijing Ruidong Technology Co. Ltd in 2013. 

Meanwhile, Liang Zeng is an internet entrepreneur and venture capitalist. He invests and incubates the companies in digital marketing, artificial intelligence and enterprise services. He has held senior positions as senior vice-president (VP) of Kingdee International Software Group, VP of Microsoft Greater China, and most recently, VP of Baidu Inc. and chief executive officer of Baidu Nuomi. He also serves as board director and strategic advisor for multiple digital marketing and technology companies.

So should you buy XOX tomorrow? 

Given all these good news, yes, one should. 

Furthermore, the stock rose in early morning trade to 12.5 sen today. At 5 p.m., it closed at 10.5 sen.

So, that's another piece of stock exchange and trading news for all of you. Again, trade with caution ok. But this news is certainly one good news for both Wetek and XOX.

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