Cloudpoint Technology Berhad Q1 2025: Navigating Growth in a Dynamic Tech Landscape
Greetings, fellow investors and tech enthusiasts! Today, we’re diving deep into the latest financial performance of CLOUDPOINT TECHNOLOGY BERHAD, a prominent player in Malaysia’s technology solutions sector. Their unaudited interim financial report for the first quarter ended 31 March 2025 has just been released, and it offers a fascinating glimpse into the company’s trajectory amidst evolving market demands.
Despite the first quarter typically being a softer period for project-based revenue in the IT sector, Cloudpoint has demonstrated impressive resilience and growth. The report highlights a significant 21.53% increase in profit attributable to owners compared to the same period last year, signaling robust operational health and strategic wins. This strong start to the financial year, coupled with a healthy order book, sets a positive tone for what’s to come. Let’s break down the key figures and insights from this report to understand Cloudpoint’s position and future prospects.
Core Financial Highlights: A Quarter of Strong Performance
Cloudpoint Technology Berhad has delivered a solid financial performance in Q1 2025, showcasing growth across key profitability metrics. Here’s a snapshot of their performance compared to the first quarter of the previous year:
Q1 2025
Revenue: RM35.59 million
Gross Profit: RM11.45 million
Profit Before Tax: RM6.66 million
Profit After Tax: RM5.06 million
Basic Earnings Per Share: 0.85 sen
Q1 2024
Revenue: RM34.66 million
Gross Profit: RM7.01 million
Profit Before Tax: RM4.87 million
Profit After Tax: RM3.70 million
Basic Earnings Per Share: 0.70 sen
This quarter saw revenue climb by 2.67% to RM35.59 million, a commendable achievement given the typical Q1 seasonality. More impressively, the Group’s gross profit surged by an outstanding 63.33%, reaching RM11.45 million. This significant improvement in gross profit flowed down to the bottom line, with profit before tax increasing by 36.69% to RM6.66 million, and profit after tax rising by 36.66% to RM5.06 million.
The basic earnings per share also saw a healthy increase, growing by 21.43% from 0.70 sen to 0.85 sen, reflecting enhanced profitability for shareholders.
Driving Forces Behind the Growth: Segment Performance
Cloudpoint’s revenue streams are diversified across several key segments:
- Project-based Income: This segment, primarily focusing on networking and cybersecurity solutions, remained the largest contributor, bringing in RM23.60 million, or 66.30% of total revenue. Key projects included network infrastructure for a customer in Cyberjaya (RM3.38 million recognised) and Bandar Baru Bangi (RM2.89 million recognised), as well as cybersecurity solutions for clients in Kuala Lumpur (RM1.12 million recognised) and Subang Jaya (RM0.72 million recognised).
- Recurring Income: Offering professional IT services, this segment contributed RM9.77 million, accounting for 27.46% of the Group’s total revenue. A significant 3-year renewal of a professional IT services contract worth RM19.33 million was secured, with RM1.52 million recognised in Q1 2025.
- Digital Applications and Cloud Services: This newer offering is rapidly gaining traction, contributing RM2.22 million to the revenue. Cloud services projects in Kuala Lumpur (RM0.70 million recognised) and Bukit Damansara (RM0.74 million recognised) were notable contributors.
Financial Health Check: Balance Sheet and Cash Flow
Understanding Cloudpoint’s financial position requires a look at its balance sheet and cash flow. As at 31 March 2025, the company’s financial structure shows some notable shifts compared to 31 December 2024:
Balance Sheet Highlights (RM’000)
| Item | 31 March 2025 (Unaudited) | 31 December 2024 (Audited) | Change (%) |
|---|---|---|---|
| Total Assets | 157,541 | 160,959 | -2.12% |
| Total Equity | 86,037 | 80,978 | +6.25% |
| Total Liabilities | 71,504 | 79,981 | -10.60% |
| Cash and Deposits | 33,057 | 42,686 | -22.56% |
| Inventories | 14,927 | 9,136 | +63.39% |
| Trade Receivables | 41,893 | 38,871 | +7.77% |
| Trade Payables | 20,108 | 38,552 | -47.84% |
| Contract Liabilities | 30,225 | 18,841 | +60.42% |
While total assets saw a slight decrease, total equity increased, reflecting improved retained earnings. A significant reduction in total liabilities, particularly trade payables, indicates efficient working capital management. The increase in inventories and trade receivables could be attributed to ongoing project activities and upcoming deliveries.
Cash Flow Performance (Q1 2025 vs Q1 2024)
Q1 2025
Net Cash from Operating Activities: (RM5.63 million)
Net Cash Used in Investing Activities: (RM3.87 million)
Net Cash Used in Financing Activities: (RM0.13 million)
Net Decrease in Cash & Cash Equivalents: (RM9.63 million)
Q1 2024
Net Cash from Operating Activities: RM13.41 million
Net Cash Used in Investing Activities: (RM31.74 million)
Net Cash Used in Financing Activities: (RM5.37 million)
Net Decrease in Cash & Cash Equivalents: (RM23.69 million)
The cash flow from operating activities turned negative in Q1 2025, which can sometimes be a normal part of business cycles, especially with changes in working capital like increased inventories and receivables. However, the company significantly reduced cash used in investing activities, indicating a more focused approach to capital expenditure compared to the previous year. Overall, the net decrease in cash and cash equivalents was smaller than in the corresponding period last year, suggesting better control over cash outflows.
Prospects and Strategic Outlook
Cloudpoint remains optimistic about its future, buoyed by a strong order book and a healthy project pipeline. The company is strategically positioned to capitalize on the increasing demand for digital and Artificial Intelligence (AI) strategies, automation, and robust data security solutions across various industries.
With its proven expertise in high-growth areas such as cybersecurity, data centers, enterprise IT infrastructure, and cloud services, Cloudpoint is well-equipped to expand its market presence beyond its traditional strength in the financial services industry. Enterprises are increasingly modernizing their networks and strengthening cybersecurity, creating a fertile ground for Cloudpoint’s solutions.
Key Acquisitions and Profit Guarantee
A significant development for Cloudpoint was the completion of the acquisitions of 75.0% equity interest in Unique Central Sdn Bhd (UCSB) and Uniqcen Sales & Services Sdn Bhd (USSSB) in December 2024. These acquisitions came with a profit guarantee from the vendors for the financial years ending 31 December 2024, 2025, and 2026.
It’s positive to note that for FYE 31 December 2024, both UCSB and USSSB have successfully achieved their respective profit guarantees, with a combined surplus of RM5.71 million against a guarantee of RM4.25 million. This achievement underscores the value and potential of these acquisitions to Cloudpoint’s overall performance.
Proposed Transfer to Main Market
Cloudpoint is also pursuing a proposed transfer of its listing from the ACE Market to the Main Market of Bursa Securities. The application was submitted to the Securities Commission Malaysia in April 2025, with completion expected by the second half of 2025. This move could potentially enhance the company’s visibility, liquidity, and access to a broader investor base.
Summary and
Cloudpoint Technology Berhad’s Q1 2025 report paints a picture of a company with strong operational momentum, achieving notable growth in profitability despite typical seasonal headwinds. The significant increase in gross profit and earnings per share demonstrates effective cost management and successful project execution. The strategic acquisitions are already proving their worth by meeting profit guarantees, adding to the Group’s robust foundation.
Looking ahead, Cloudpoint appears well-positioned to capitalize on the growing demand for digital transformation, AI, and cybersecurity solutions. The healthy order book and pipeline, coupled with the ongoing efforts to expand beyond financial services, suggest a positive outlook for the remainder of the financial year. The proposed transfer to the Main Market could further elevate its profile and attract more attention.
However, as with any investment, it is crucial for retail investors to conduct their own thorough due diligence. Key points to consider for future monitoring include:
- The sustainability of the enhanced gross profit margins in subsequent quarters.
- The ability to maintain positive cash flow from operations, especially given the negative figure this quarter.
- The successful integration and continued performance of the newly acquired subsidiaries (UCSB and USSSB) in meeting future profit guarantees.
- The progress and impact of the proposed transfer to the Main Market on the company’s valuation and investor perception.
- The company’s ability to navigate competitive pressures and macroeconomic shifts in the technology sector.
What are your thoughts on Cloudpoint Technology Berhad’s latest performance? Do you believe the company can sustain this growth momentum and successfully execute its strategic initiatives in the coming quarters? Share your insights and perspectives in the comments below!
Stay tuned for more in-depth analyses of Malaysian companies. Happy investing!
