Azeus Systems Holdings

[weijian]

The Azeus System guys did not give specific numbers like the ones at IFAST did, so the OPMI had to ask. But the OPMI was also brave enough to ask "what happens after the project is completed?" and Azeus System guys were braver to answer directly.

MINUTES OF THE ANNUAL GENERAL MEETING

Regarding the HK$1 billion project with the Hong Kong government, could you clarify how much of that revenue has already been recognised, and when will the remaining portion be recognised? Additionally, once the revenue from this project is fully recognised, should we anticipate a significant decline in revenue, given that there will be no further one-off revenue from this project after fiscal year 2027?

Response
The HK$1 billion contract, that is, the CERKS Convene Records contract with the Hong Kong Government, comprises a one-time implementation and customisation service, as well as recurring system maintenance and support service which is for a 10-year contract period.

The implementation and deployment phase is expected to be completed by fiscal year 2027. The license fees revenue component of the project is based on the actual number of users procured by each government department and bureau. At the current stage, all the customisation work is completed and CERKS is being deployed to the various Hong Kong government departments and bureaus. We are on track with the project work plan.

We are unable to predict the overall revenue growth for fiscal year 2028 after the Convene Records project deployment is completed. However, the contribution of Convene Records to the Company’s revenue is expected to be significantly reduced.

MoM:
https://links.sgx.com/FileOpen/Azeus%20F...eID=817525

A change of disclosure standards it seem for this year. First, Mgt has broken down the one time and recurring portion of the 1bil value of the CERKS project. Next, they have even given the cumulative % of revenue recognition at end FY25 (revenue recognition for the implementation probably largely started in 2nd half 2024). Doing a simple back of envelope calculation (and using some common sense), FY25/FY26 will probably be the 2 peak years of revenue. This is assuming the absence of any changes to CERKS or their other revenue streams (especially the main Convene Records)

Contract liabilties:
FY25:116mil
FY24:101mil
FY23:86mil
FY22:68mil, FY21:64mil and FY20:37mil


RESPONSES TO QUESTIONS RECEIVED FROM SHAREHOLDERS AND THE SECURITIES INVESTORS ASSOCIATION (SINGAPORE) PRIOR TO THE COMPANY‘S ANNUAL GENERAL MEETING

As disclosed upon the award of the contract on 9 May 2022, the total estimated contract value is HK$1.02 billion. This will cover the design and development
of CERKS with a total estimated implementation price of HK$633.9 million, as well as estimated maintenance and support for the system for 10 years of HK$381.4 million following its implementation. The actual total contract value will be subject to change upon confirmation of the number of users from the Hong Kong government.

As at 31 March 2025, the accumulated revenue which has been recognised was roughly 40% of the implementation price. We anticipate the revenue for the CERKS contract in FY2026 to be similar as FY2025, subject to the changes in the deployment schedule and the actual numbers of users. The final number of deployed users and contract price is expected to fluctuate as deployment continues.

The one-off implementation and deployment phase is expected to be completed by fiscal year 2027. Post deployment, the recurring revenue, which represents the maintenance and support fees of approximately HK$381.4 million, will be recognised and will cover a period of 10 years.

https://links.sgx.com/FileOpen/Azeus%20-...eID=853039