INFOM: Strategic Growth Drivers Bolster Earnings Outlook, Target Price Increased
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading technology company is poised for significant growth, with its strategic initiatives, including substantial order wins and expansion into key markets, demonstrating strong execution on its investment thesis. The company has seen its target price revised upward by TA SECURITIES, maintaining a “BUY” recommendation, reflecting strengthening visibility and unpriced growth optionalities.
Performance Review
The company’s performance is aligning with expectations, driven by robust order book expansion and successful market penetration. Analysts have raised the FY27F earnings forecast by an impressive 32%, underscoring the positive momentum generated by these strategic moves. Despite a bullish outlook, the stock currently trades at a discount to its historical average implied PE, suggesting an attractive entry point.
Future Outlook and Growth Drivers
The order book is on a trajectory to double, projected to reach RM500-600 million by the end of FY26. Recent contract successes include a RM66 million win from Japan’s National Registration Department and an additional RM79 million from the Philippines’s Metropolitan Bank, signaling sustained growth momentum. Furthermore, approximately US$50 million worth of contracts are due for renewal in December 2025 to January 2026, which is expected to underpin continued growth visibility.
Expansion into Japan is a pivotal component of the company’s growth strategy, forecast to contribute 8% of FY26F and 14% of FY27F revenues. The total addressable market (TAM) in Japan has increased by RM100 million, and the company has already successfully onboarded a significant number of customers.
AI Optionality
A key unpriced growth catalyst lies in the company’s burgeoning Artificial Intelligence (AI) venture. This segment is estimated to add an additional 10% to FY27F revenues. The AI business model is multifaceted, encompassing data monetization, strategic partnerships, and the provision of AI software solutions designed to automate backend processes and enhance data analysis capabilities for enterprises. This AI optionality is expected to drive future re-rating of the stock.
Investment Recommendation
TA SECURITIES has reiterated its “BUY” recommendation for the company, raising the target price to RM0.25, representing a 25.0% upside from the last traded price of RM0.20. The valuation is based on an unchanged target PE, rolled forward to CY27, capturing a 12-month view. This revised outlook reinforces confidence in the company’s sustained growth trajectory and its ability to unlock further value.
