Kuala lumpur: NexG Bhd says its wholly owned subsidiary Datasonic Technologies Sdn Bhd (DTSB), which is the provider of the MyKad national identity card, is currently valued at RM7.5 billion following the government's request for an indicative price.

According to BERNAMA News Agency, the request for an indicative price is for a potential acquisition of DTSB. NexG, a prominent security-related integrated technology solutions provider, stated that DTSB forms the core operating business and is the main revenue and earnings contributor for the group. The disposal of DTSB would effectively mean NexG would no longer have a core business.

NexG's board acknowledges the government's request and will consider it carefully. As of now, no decision has been made to proceed with any transaction, nor has any agreement been reached with the government. NexG emphasized that any potential transaction would need to be at a fair value, equally treat all shareholders, and preserve the security and continuity of the national identity capability operated by DTSB.

The RM7.5 billion sum-of-parts valuation for DTSB is a preliminary internal assessment, not an independent valuation or agreed price. This assessed value is significantly above the current market capitalisation of NexG, approximately RM1.04 billion.

NexG highlighted the importance of DTSB as Malaysia explores the modernisation of voting, including biometric voter verification and electronic voting, which require a trusted, biometrically verifiable national identity. A change in ownership of DTSB would have significant implications regardless of the new owner.

DTSB is not a single product or contract but an integrated, sovereign, end-to-end national identity business supplying Malaysia's identity and secure documents since 1999. It also serves as the vendor for Malaysia's ICAO-compliant passport since 2012 and holds mandates for new-structure MyKad, MyTentera, and MyPOCA identity cards with multi-year supply commitments.

NexG stated that DTSB owns valuable intellectual property, including its patent-pending biometric QR citizen verification flow. This technology guards against impersonation, forged documents, and spoofing. DTSB's identity technology includes ICAO-compliant e-passports and biometric systems using multimodal biometrics and facial recognition.

For the current national identity programme, DTSB has committed investments of about RM1.9 billion in people, equipment, system upgrades, and two manufacturing plants. Furthermore, DTSB is developing a modular digital ecosystem or 'SuperApp' that integrates a biometric QR identity verification platform for banks and a government e-wallet for targeted subsidies.

NexG explained that the next-generation MyKad extends beyond a physical identity card, featuring a proprietary encrypted QR identity function. It includes SALUR, a government digital wallet, enabling the distribution of targeted subsidies and benefits digitally.

All these characteristics underpin the board's assessment of DTSB's value at about RM7.5 billion. Under the Main Market listing requirement, disposing of NexG's core business would require shareholder approval and the appointment of an independent adviser. NexG will comply with all applicable requirements and provide further announcements as developments occur.