“Despite the current subdued short- term prospects, the semiconductor chips sector remains poised for robust long-term growth. Advancements in technology remain unabated. The proliferation of artificial intelligence applications, along with requirements for high-performance computing, will result in an increasing need for high- density chips with enhanced processing power and larger memory storage.”

Dear Shareholders,

On behalf of the Board of Directors, I present to you the annual report for the financial year ended 31 December 2023 (“FY2023”).

The year was characterized by difficult financial and economic circumstances. Increasing geopolitical uncertainty, ongoing high inflationary pressures and consequent fluctuations in interest rates and currency volatilities significantly influenced the global economy in FY2023. These factors contributed to weakened demand in both consumer and industrial markets across most of the regions in Asia, adversely affecting our business’s top line and overall performance.

Financial Performance

In FY2023, revenue declined by 16% to US$759.0 million from US$906.7 million in FY2022, primarily due to a slowdown in our main revenue-driving sector, electronic components distribution.

Despite expectations of supply chain normalization post- COVID-19, rampant inflation and rising interest rates have subdued market conditions, leading to reduced demand from our customers. This, coupled with the easing of pandemic-induced urgency to stock up on semiconductor chips and oversupply in the supply chain due to weakened demand, contributed to the decline in revenue for our core electronic components distribution business. Additionally, we had to allocate further provisions for inventory obsolescence during the year under review.

However, our other two business segments; consumer products distribution, and other businesses, experienced growth in revenue contributions. Revenue from consumer products distribution surged by 45%, driven by improved performances in computer peripherals sales from both existing and new product lines in Malaysia and Thailand subsidiaries. Meanwhile, revenue from other businesses rose by 12%, mainly attributed to increased sales in our medical device assembly and distribution business.

Despite facing intense market competition and challenging economic conditions, the Group achieved a gross profit margin of 7.8%, representing a 0.3-point decrease from FY2022.

The above factors, combined with high interest expenses and foreign exchange loss resulted in the Group recording a higher net loss of US$14.8 million in FY2023 compared to a net loss of US$4.6 million a year ago.

Proposed Reverse Takeover of Achieva Technology

On 27 March 2024, the shareholders of the Company has approved in an Extraordinary General Meeting the proposed disposal of our consumer products distribution entities, wholly-owned subsidiary, Achieva Technology Sdn. Bhd. (“Achieva Technology Malaysia”) and 49.0%-owned subsidiary, Achieva Digital (Thailand) Company Limited (“Achieva Digital Thailand”) via a reverse takeover (“RTO”) of Singapore Exchange Catalist- listed, Axington Inc. (to be re-named Serial Achieva Limited upon completion of the RTO). The completion of the RTO is still subjected to the satisfaction of all condition precedents in the Sales and Purchase Agreement entered with Axington Inc. Serial Achieva Limited will become a subsidiary of the Company post- completion. Shareholders of Axington Inc. have also approved the RTO in an extraordinary general meeting held on 22 January 2024.

Founded in 1996, Achieva Technology Malaysia was acquired by Serial System in January 2016. Today, it has grown to become the leading information technology and computer peripherals distributor in Malaysia. In April 2022, the Group further expanded into Thailand through a 49%-owned subsidiary, Achieva Technology (Thailand) Company Limited. Upon completion of the RTO, Achieva Technology (Thailand) Company Limited will transfer its information technology and computer peripherals distribution business to Achieva Digital Thailand.

The RTO will enable Achieva Technology Malaysia and Achieva Digital Thailand to access capital markets independently, facilitating their growth and expansion through working with existing and new suppliers to expand the product offerings and range as well as the increase of customers. In addition, Serial Achieva Limited has plans to expand into other countries, including Vietnam, Philippines and Indonesia, organically or through strategic alliances and/or acquisitions.

With a separate listing platform of its consumer products distribution entities, shareholders of the Company will continue to benefit from the future potentials of these entities through their indirect shareholding interest via the Company. Shareholders of the Company and new investors will also have the flexibility to decide whether to invest directly in the shares of either or both listed entities, in accordance with their personal preferences and risk appetites, thereby allowing them more opportunity for diversification of their investments.


No dividend has been proposed for FY2023 as the Board of Directors of the Company deemed it necessary to preserve cash for working capital requirements and taking into consideration the loss incurred for FY2023.


Despite the current subdued short-term prospects, the semiconductor chips sector remains poised for robust long-term growth. Advancements in technology remain unabated. The proliferation of artificial intelligence applications, along with requirements for high- performance computing, will result in an increasing need for high-density chips with enhanced processing power and larger memory storage. We observed a stabilization in semiconductor chips demand during the third quarter of 2023, with a subtle recovery noted in the fourth quarter of 2023, particularly in China, the primary market in which the Group operates in.

While the electronic components distribution business continues to operate in a highly challenging environment amid elevated interest rates, currency volatilities, potential supply chain disruptions stemming from geopolitical tensions, Serial System remains optimally positioned to provide unparalleled distribution expertise to our customers. The Group remains cautiously optimistic that business can bounce back from its 2023 downturn. We believe that artificial intelligence adoptions alongside the stabilizing demand for consumer electronics, telecommunications infrastructure, industrial IOT and growth in the electric vehicle industry will be the bright spots in 2024.

The Group will continue to leverage its position as a leading distributor of consumer products in Malaysia and Thailand to increase its range of product offerings. Specifically, our Thailand subsidiary has since widened its range of products, and intends to expand its supplier base in 2024. These initiatives are expected to enhance the Group’s consumer products distribution business, driven by an expanded product portfolio and a larger number of suppliers.

However, the operating landscape in Asia, where the Group predominantly operates, remains challenging. Ongoing tensions in Sino-US trade relations, the Russia- Ukraine conflict, and escalating conflicts in Gaza continue to cast geopolitical uncertainty, impacting global supply chains. Furthermore, persistently high interest rates and inflation are likely to exert pressure on operating costs, heighten currency volatilities, and potentially affect consumer demand

Nevertheless, we believe that the Group has navigated through the worst of these challenges. Customer inventories are anticipated to reach a healthy level soon, and the Group is primed to accommodate new orders. It is expected that interest rates have reached their peak, with a potential decrease anticipated sometime in 2024. Continual review of operations to enhance efficiency, cost-cutting measures where necessary, and vigilant management of inventory and credit are central to our strategic approach.

Appreciation & Acknowledgements

On behalf of the Board of Directors and Management, I would like to convey my heartfelt thanks to our customers, business partners and staff for their support and hard work during these challenging times. Your trust and commitment to Serial System have been instrumental in our journey thus far.

Lastly, I wish to express my gratitude to our shareholders, for your unwavering faith and support throughout this challenging year. We will continue to seize new opportunities and build upon our foundation to enhance long term shareholder value.

Dato’ Seri Dr. Derek Goh Bak Heng BBM(L)
Executive Chairman & Group Chief Executive Officer
April 2024