SCB Prospectus - Announcements - Bursa Malaysia

Company No. 462648-V
4. RISK FACTORS
YOU SHOULD RELY ON YOUR OWN EVALUATION AND CAREFULLY CONSIDER THE MERITS,
RISKS AND INVESTMENT CONSIDERATIONS AS SET OUT BELOW, TOGETHER WITH THE
REST OF THE INFORMATION IN THIS INTRODUCTORY DOCUMENT. THE INFORMATION
BELOW MAY NOT BE EXHAUSTIVE. ADDITIONAL RISKS AND UNCERTAINTIES, WHETHER
KNOWN OR UNKNOWN, MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR COMPANY AND
SHARES IN THE FUTURE.
4.1 RISKS RELATING TO OUR INDUSTRY AND OUR BUSINESS
4.1.1 Competition
The SCADA market is a niche, competitive and rapidly changing market within the
larger market for process control systems. Our Group has experienced and expects
to continue to experience intense competition from current and future competitors.
Our Group believes that our ability to compete depends upon many factors within and
outside of our control, including the timing and market acceptance of new products
and services and also enhancements developed by our Group and our competitors,
product functionality, ease of use, performance, price, value for money, reliability,
customer service and support, sales and marketing efforts, product distribution
channels and the resources of competitors.
However, our Group has been in operation since 1987 and has vast experience in
regard to the Malaysian and Singaporean markets. To mitigate the risk of
competition, our Group focuses on technologies which are highly reliable and has the
competitive advantage in being the one of the few integrated SCADA providers in
Malaysia and Singapore that offers real time video capabilities. The systems which
our Group supplies are also customised, thus providing a degree of differentiation
which helps to secure further business from the customers.
Our Group's technological platforms for our SCADA systems are on par with the
global technological advances in the SCADA and information technology industries.
This is evident in the SysLink 3 system whose sophistication and flexibility enable its
deployment in diverse industrial applications. Our Group's progressive R&D effort has
produced SCADA products which are on par with, if not ahead of, other SCADA
products being developed around the world. The competition comes from other
SCADA software in the utilities market which includes Citect, iFix, Cimplicity, iSCADA
and WinCC. Our Group believes that the technology would continue to evolve in the
SCADA software market. Anticipating this, our Group believes that software
innovation and prompt service are critical in retaining our current customer base
amidst the competitive and changing environment. Our Group would continue to
improve the product through constant upgrades and improvements, in line with our
ongoing R&D efforts.
4.1.2 Rapid Technological / Product Change in the SCADA Market
The market for our Group's products is characterised by rapid technological
developments, evolving industry standards, swift changes in customer requirements,
computer operating environments and software and hardware applications, and
frequent new product introductions and enhancements. Our Group's future depends
substantially upon our ability to address the increasingly sophisticated needs of our
customers. To the extent that one or more of our Group's competitors introduce
products and services that better address customer needs or for any reason gain
market share, our Group's business, operating results and financial condition could
be materially adversely affected. Our Group may or may not be successful in
developing and marketing new products or enhancements to our existing products to
adequately address the changing needs of the marketplace. In recognition of this, our
Group constantly endeavours to develop and/or enhance our products expeditiously.
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