DO your business, get it right. If your business is right, it speaks for itself – this is Henn Tan’s basic principle when it comes to running an enterprise.
The chairman and CEO of Trek2000 International Limited told The Business Times during an interview recently that passion in serving the needs of society, and not money, is what drives him.
“Shareholders have come to tell me: ‘Why aren’t you monitoring your share price movements?’ Every CEO in a public-listed company would have done that. Money doesn’t drive me. Passion in doing what I want to do, (the ability) to come up with things that the world lacks is my driver,” he said.
Famed for being the inventor behind the thumb drive, which changed the portable media storage industry, Trek2000 has come a long way since its years as a storage products firm.
Following the success of the thumb drive, the group went on to develop products like the FluCard, which was unveiled in early 2010. The FluCard is a WiFi-enabled memory card similar to an SD card. The FluCard allows the wireless transfer of data onto the Internet and between FluCard-equipped devices.
Later that year, in October 2010, Trek2000 announced the launch of the Ai-Ball, a portable WiFi remote camera roughly the size of a Singapore 50-cent coin that allowed 2MP (megapixel) video streams up to a distance of 20 metres without the use of wires. These products were at the cutting edge of technology when they were launched.
The group’s Interactive Consumer Solutions (ICS) business division that includes the thumb drive, FluCard, security solutions, and WiFi memory modules for embedded devices, contributed 98.4 per cent of overall revenue, which rose by 11.4 per cent to US$165.7 million in fiscal 2016.
The ICS division reported a 15.5 per cent year-on-year increase in revenue to US$163.1 million during fiscal 2016, driven by increased sales of expanded WiFi and Internet of Things (IoT) memory module applications.
While the thumb drive and FluCard continue to be key revenue contributors, about 60-70 per cent of Trek2000’s business is now driven by the IoT model.
Expanding on the IoT model, the company is focused on the expansion into medical technology – a market which is expected to be worth US$133 billion by 2020 in Asia-Pacific, up from US$88 billion in 2015, according to McKinsey & Company. By 2020, Asia-Pacific is expected to surpass the European Union as the world’s second-largest medtech market (after the United States).
Trek2000 has come up with a patient alert system for dementia patients. The wearable device has inbuilt Bluetooth and sensor capabilities that are pressure-driven. Worn on the ankle, it will trigger and alert medical staff via a mobile phone or computer when a patient gets off the bed.
The company has many other ideas, including a reusable smart sensor device that is pasted onto diapers. A caregiver will be alerted via a mobile app that triggers an alarm when a wet diaper needs to be changed.
The products are currently distributed to a big charity healthcare institution whose name Trek2000 is not willing to disclose. The company said that it is exploring other opportunities with various healthcare groups to grow its medtech business further, as well as to diversify its customer base.
In its second quarter 2017 results, Trek2000 recorded a 78.7 per cent rise in net profit to US$2.1 million. For the three months ended June 30, 2017, revenue dipped 38.8 per cent to US$29.8 million compared to the year before. This was attributed to a decline in sales from its ICS division and the disposal of its 19 per cent stake in subsidiary Racer Technology Pte Ltd.
In March, Trek2000 sold its stake in Racer Technology to Racer's chief executive for S$3 million. Trek2000 said that it was divesting the stake in the plastic products manufacturer so that it could focus on its core electronics and technology business.
Trek2000 came under fire in May last year when it was investigated for some sale transactions between one of its subsidiaries and a customer. The stock had to suspend trading on April 27, 2016, but resumed trading on Sept 11 this year. It is undergoing phase two of a review that is looking into selected interested party transactions. The review is scheduled to conclude in the coming weeks, the company said.
On why he had not stepped down as CEO and chairman since the investigations, Mr Tan said that his management staff, who are Japanese, were against the idea.
“When there's any big problem, you have to step down and do ‘harakiri’, whether you like it or not. They stopped me. (They said) if you think there's a problem, you should stay behind and solve it,” he said.
While he did not disclose Trek2000’s revenue target for the 2018 fiscal year, he said that his main focus is strengthening the company’s bottom line.
Mr Tan, who is the single largest shareholder of Trek2000 with about a 30 per cent stake, has been exploring overseas markets like China and Taiwan.
Last month, Toshiba, one of Trek2000’s shareholders, announced that it sold its chip division for 2 trillion yen (S$24.2 billion) to a Bain Capital-led consortium.
On whether the situation will take a toll on Trek2000’s business since most of its products are memory-based, Mr Tan said: “We have an agreement that we're committed to each other. They will continue to adhere to all business agreed in the past.”