18 July 2025

Cloudpoint Technology (CLOUDPT MK)

Stable Bank Clients, Scalable AI & DC Play; BUY

Forecasts and Valuation

Source: Company data, RHB

Emissions And ESG

Trend analysis

Electricity usage has increased in FY24 due to expansion of business and headcount.

Source: Company data, RHB

Latest ESG-Related Developments

ESG Unbundled

Overall ESG Score:

Last Updated: 17 July 2025

E Score: 4.0 (EXCELLENT)
CLOUDPT has minimal environmental impact due to its IT-focused operations, with low GHG emissions and limited resource consumption. It promotes energy and water efficiency through employee engagement and infrastructure upgrades, including plans to relocate to a green-certified building.

S Score: 4.0 (EXCELLENT)
CLOUDPT upholds ethical labour practices, gender equality, and workplace safety, with no human rights violations or workplace injuries reported in FY24. It supports local talent with structured training, competitive remuneration, and team-building initiatives to foster a diverse and inclusive workplace.

G Score: 4.0 (EXCELLENT)
Board is 57% independent, with fully independent committees, a 43% female representation, and a clear separation between the CEO and Chairman roles. The group enforces strong ethical standards through key policies including a Code of Conduct, Anti-Bribery Policy, and Whistleblowing Policy.

ESG Rating History

Note: A chart showing ESG Rating History from 1.5 to 4.0 between Jul-23 and Jul-25 is depicted in the original report.

Source: RHB

Recommendation Chart

Source: RHB, Bloomberg

Financial Exhibits

Source: Company data, RHB

Valuation And Recommendation

Initiating coverage on CLOUDPT with a BUY and MYR1.13 TP. The valuation implies a 20x FY26F P/E, which is in line with FY26F P/E of both the Bursa Malaysia Technology Index and local IT providers with large exposure to FIs (Figure 1). We believe the valuation is warranted and can be justified by the group’s:

• Large exposure to FIs which is sticky and stable;
• Increasing recurring income (50% of total gross profit);
• Track record of financial consistency – in terms of growth and margin;
• Above average earnings growth.

Valuation. With its healthy balance sheet and expected high earnings growth, we ascribe 20x P/E on FY26F earnings, to arrive at a FV of MYR1.08. The valuation is on par with the 2-year consensus forward P/E of the local ICT players which have large exposure to FIs – these players include LGMS (LGMS MK, NR) and Infomina (INFOM MK, NR).

Figure 1: Peer comparison – Local ICT players with high exposure in FIs

Source: Bloomberg, RHB

SWOT Analysis

Investment Thesis

Solid track record with local FIs. It is crucial for FIs to have high-performance network infrastructure to support their mission-critical applications. Due to the regulated business environment, most FIs tend to have higher stickiness with their IT service providers to avoid unnecessary technical interruptions especially cyber-attacks and threats. More than 90% of CLOUDPT’s FY24 sales are generated from FIs that it has more than 10 years of professional ties with. It is also evident that its biggest Fl customers including RHB Bank (RHBBANK, NR) have been increasing their service value with the group, allowing it to record a 5-year CAGR of 20.3% (from MYR15.9m in FY19 to c.MYR40m in FY24). CLOUDPT also secured several new Fl customers post listing – players in insurance, asset management and smaller banks with legacy IT infrastructure. Among the new Fl customers, two are Malaysian Tier-1 banks, bringing the group’s total to four out of five local Tier-1 banks served from FY24. This is a testament to the group’s quality solutions and after-sales support.

Continuously expanding technology solutions for potential cross-selling. The group remains aware of the latest customer trends and requirements, as well as its principals’ innovations and product upgrades, and the renewal of their solutions such as the adoption of Al in cybersecurity. Leveraging on its strong customer base, the wide range of solutions allows CLOUDPT to cross-sell products to customers and provide one-stop solutions that help to cut down customers’ cost and inconvenience in dealing with multiple service providers.

Growing demand for networking and cybersecurity solutions. Data digitalisation, a remote working environment, the growing number of businesses, government initiatives, increased sophistication in threats and regulatory compliance are boosting the adoption of more networking and cybersecurity solutions. According to Market Report Analytics, the Malaysia data centre networking market, valued at approximately MYR301.3m in 2025, is projected to grow at a CAGR of 11.6% from 2025 to 2033. The Malaysia cybersecurity industry is expected to reach USD2.06bn by 2028, growing at a CAGR of 16.8% (2023-2028) (Research and Markets). As CLOUDPT’s market share in networking, cybersecurity and cloud solutions is still relatively small, we expect it to capture a larger market share going forward, due to its solid track record. Especially with its experience in serving high-compliance Fl customers, we are confident that the group is well positioned to extend its expertise to new industries and untapped clients, thereby accelerating its market share expansion.

Expecting three technology refresh contracts. CLOUDPT is in talks for three major technology refresh contracts from its Fl customers for both networking and cybersecurity solutions, to be recognised mostly in 2H25. According to management, these projects are typically 2-5x bigger than its usual contract value of MYR2-5m – as the former spans both production and disaster recovery sites as well as involves multiple replacements for equipment.

Company Overview

CLOUDPT is an IT solutions provider based in Malaysia. The group usually provides services in designing and tailoring solutions based on its customers’ IT environment and business needs. It also offers project management, installation and system integration services, as well as professional IT maintenance and network monitoring services. The products and services offered are mainly enterprise and data centre networking solutions, cybersecurity solutions, professional IT services as well as cloud services and software applications.

The group business segments are based on the following models:

1. One-off project-based income model (69.2% of FY24 revenue). This includes sales of hardware, software license subscription fees, implementation service fees, and one-off project-based fees for cloud consultancy services. The group is engaged by its customers for:
   • Enterprise and data centre networking solutions (28.5% of FY24 revenue). CLOUDPT’s comprehensive portfolio includes LAN, WAN, VPN, software-defined infrastructure, and collaboration tools.
   • Cybersecurity solutions (40.7% of FY24 revenue). CLOUDPT’s expertise lies in designing and deploying integrated cybersecurity solutions, including firewalls, SIEM, SOAR, cloud security, and more.
2. Recurring income model (19.9% of FY24 revenue). It typically comprises annual contract fees and service fees, with tenures of 1-3 years.
   • Professional IT services (19.9% of FY24 revenue). CLOUDPT’s comprehensive suite of professional IT services includes preventive maintenance, troubleshooting, and 24/7 technical support.
3. Digital applications and cloud services (10.9% of FY24 revenue). This segment includes cloud consultancy, management, migration, and support for intelligent platforms like ServiceNow and Sunline.

Key Risks

• Dependent on customers involved in financial services. The group may be adversely impacted if there is a slowdown in the financial services industry.
• Unexpected delays or interruptions. Any delays in the progress of its projects would affect the timing of its delivery and slow down revenue recognition.
• High reliance on new project and orders. The absence of long-term contracts poses a risk of losing customers.
• Loss of executive directors and key senior management. Continued success is heavily dependent upon the services of its executive directors and key senior management.

ESG Efforts

Environmental: Given CLOUDPT’s primary focus on IT services, direct GHG emissions are minimal. Resource consumption is primarily limited to energy and water usage. The group plans to relocate to an energy-efficient building within two years.

Social: CLOUDPT’s approach is anchored in its Human Rights Policy. The workforce consists entirely of local hires. The group invested RM48,875 in training initiatives in FY24 and reported zero workplace injuries.

Governance: CLOUDPT’s Board of Directors consists of seven members, with 57% serving as Independent and Non-Executive Directors. The roles of the CEO and Chairman are held by separate individuals. The group has established robust corporate policies including a Code of Conduct, Anti-Bribery Policy, and Whistleblowing Policy.