Core Financial Highlights: A Quarter of Explosive Growth

SNS Network Technology Berhad has kicked off its financial year 2025 with an exceptional performance in the first quarter. The figures speak volumes, particularly when viewed against the same period last year. The company’s strategic focus on expanding its ICT product sales, especially through commercial and online channels, has clearly paid off.

Year-on-Year Performance (Q1 FY2025 vs. Q1 FY2024)

The growth witnessed in this quarter is truly significant. Let’s break down the key figures:

As you can see, revenue surged by an impressive 285.2%, jumping from RM213.59 million to RM822.75 million. This massive increase was primarily driven by robust sales of ICT products across both commercial and online platforms. Consequently, Profit Before Tax skyrocketed by 163.1% to RM13.44 million, and Profit After Tax attributable to equity holders saw an even higher jump of 173.7% to RM10.24 million. Basic Earnings Per Share also reflected this strong growth, rising from 0.23 sen to 0.61 sen.

Quarter-on-Quarter Performance (Q1 FY2025 vs. Q4 FY2024)

While the year-on-year comparison shows explosive growth, a look at the immediate preceding quarter provides a nuanced picture:

Revenue increased substantially by 227.1% from RM251.51 million in the previous quarter, again highlighting the strong demand for ICT products. However, Profit Before Tax saw a 23.7% decrease, falling from RM17.61 million to RM13.44 million. The report attributes this dip to the sales of certain ICT products yielding lower gross profit margins in the current quarter. Interestingly, Profit After Tax still managed a slight increase of 2.2%, primarily due to an adjustment for prior financial year deferred tax expenses recorded in the immediate preceding financial quarter.

Business Segment Performance

The dominance of ICT product sales is evident across the business activities:

The vast majority of revenue, RM820.48 million, comes from the sale of ICT products, showcasing the company’s core strength. While the service segment also saw a slight increase, it remains a smaller contributor to the overall top line.

Geographically, Malaysia continues to be the primary market, but the company is also expanding its reach, with notable contributions from Singapore and a new presence in Hong Kong this quarter.

Financial Health: Balance Sheet and Cash Flow

The company’s financial position has strengthened considerably. Total assets increased to RM869.43 million as of 30 April 2025, up from RM560.41 million at the end of January 2025. This growth is supported by an increase in total equity to RM284.54 million, resulting in a net asset per ordinary share of RM0.17.

One of the most encouraging aspects of this report is the significant turnaround in cash flow from operating activities. The Group generated RM70.40 million in net cash from operations this quarter, a stark contrast to the RM44.63 million net cash used in the corresponding period last year. This robust cash generation is vital for funding future growth initiatives and maintaining financial flexibility. While total borrowings have increased to RM151.42 million from RM94.13 million, this appears to be managed well given the substantial increase in cash and cash equivalents, which surged to RM201.43 million from RM84.60 million at the beginning of the financial period.

Future-Proofing: Risks and Prospects

SNS Network is not resting on its laurels. The company acknowledges the dynamic nature of the ICT industry and is proactively positioning itself for future growth. The industry continues to be driven by increasing ICT adoption in daily life and business, device replacement cycles, ongoing technological advancements, government digital transformation initiatives, and the integration of ICT in education.

Strategic Expansion and Diversification

To capitalize on these trends, SNS Network is actively expanding its physical footprint, with plans to set up 10 new stores across Malaysia. Two multi-brand concept stores and three brand-specific stores have already been launched, including two additional brand-specific stores in Penang during this quarter. This expansion aims to broaden the company’s customer base and enhance market reach.

Furthermore, the demand for Device-as-a-Service (DaaS) subscriptions is on the rise as businesses seek greater flexibility and reduced upfront capital expenditure. SNS Network continues to prioritize and expand its DaaS offerings to meet this growing need, supporting both existing and future subscription agreements.

Embracing the AI Revolution: The SNS AI Factory

Perhaps the most exciting development is SNS Network’s strategic pivot towards Artificial Intelligence. The company firmly believes that AI will play a pivotal role in its future success. They are not just talking about AI; they are building the infrastructure for it.

This initiative is designed to accelerate AI adoption across various industries by offering flexible subscription models, AI readiness assessments, and proof-of-concept (POC) programs. Importantly, half of the AI Factory’s computing power is dedicated to developing Malaysia’s AI ecosystem through training programs, bootcamps, and industry hackathons. This strategic move not only enhances local access to cutting-edge AI infrastructure but also positions SNS Network at the forefront of AI innovation in Malaysia, aligning with national aspirations for technological advancement and talent growth.

The Group remains optimistic about the ICT industry outlook, particularly with the rapid advancements in AI technologies, expecting this to drive stronger demand for ICT products, solidify its customer base, and expand market share.