| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
An IT solutions provider is bracing for a robust second half of the year, driven by accelerating IT spending across key sectors and significant client acquisitions. The company has reaffirmed its positive trajectory, reiterating its bottom-line margin guidance of 12-14% for the fiscal year 2025.
Performance Review and Growth Drivers
Management anticipates a stronger second half performance, largely fueled by increased IT expenditure from financial services industry (FSI) clients, solid data centre projects under its Unique Central (UC) division, and higher revenue streams from ServiceNow application implementation and licensing for a prominent local bank. A notable increase in inquiries for advanced cybersecurity tools, including firewall, endpoint security, and dark web monitoring, underscores a growing market demand for preventive solutions that enhance security systems.
Expanding Portfolio and Strategic Partnerships
The company has significantly broadened its client base, onboarding five new clients during the quarter. These include a national payment provider, an SGX-listed fintech company, a Singapore-based regional bank, a government agency, and a cooperative bank. Furthermore, it has bolstered its cybersecurity offerings by incorporating new solution providers such as Elastic (AI search & SIEM), SecurityScorecard (real-time credit rating), CISCO AI Access Control, and Zscaler AI. In a strategic move into data warehousing, the group also plans to partner with US-based Cloudera, aiming to establish a unified platform for FSI clients to manage data for real-time analytics, compliance, and decision-making.
Record Order Book and UC Expansion
The outstanding order book has reached a record RM110 million, with over 70% slated for recognition this year. The overall tender book has surpassed RM230 million, demonstrating a high success rate in securing FSI-related contracts. Of the three major tech refresh projects, the company has secured Phase 1 (RM5 million) of the first project, with another RM5 million expected soon. Results for the remaining two projects (valued between RM40-50 million) are anticipated next month. For ServiceNow applications, several proposals have been submitted for top-tier clients, including a local bank, a sovereign wealth fund, and a Government-Linked Company (GLC) fund.
The Unique Central (UC) division has commenced liquid cooling infrastructure installations and maintenance, addressing the modern data centre’s challenge of managing increased heat. UC has secured two major service contracts: one for the installation of 1,000 GPU server racks with liquid cooling, and another for the K2 expansion project installation works. Additionally, UC has onboarded a regional bank for cabling works and secured a fibre cabling contract for a telco client.
Analyst Rating and Outlook
PublicInvest Research maintains its Outperform call on the company, with an unchanged target price of RM1.22, based on 26x FY26 earnings per share. The current share price stands at RM0.755, suggesting an expected return of +61.5%. The company’s transfer to the Main Market is scheduled for October 13.
