INFOM: Digital Infrastructure Provider Poised for Substantial Growth, ‘Buy’ Rating Affirmed

AmInvestment Bank has reiterated its “Buy” recommendation and set a new target price for a key digital infrastructure provider, citing robust future earnings prospects driven by strategic initiatives and market expansion. The financial institution sees significant upside, primarily from the company’s innovative AI venture and strong contract renewals.

Growth Drivers and Future Outlook

The research report highlights the company’s projected “breakout year” in FY27, with earnings forecasted to surge by 32% year-on-year to RM43 million. This robust growth is underpinned by two major contract renewals, which represent approximately 35% of the existing renewal base, alongside continued successful expansion into the Japanese market. Renewal fees, typically increasing by about 5% annually, are expected to provide consistent uplift. Japan is anticipated to contribute 8% to FY26F revenue, growing to 14% in FY27F, with 10 customers already onboarded from a pool of over 40 potential clients, indicating solid early traction.

A significant catalyst for growth is the company’s AI arm, Infomina Geolytik. This venture is expected to act as an incubator for early-stage opportunities, with its 51% stake potentially contributing substantially to the company’s valuation. Infomina Geolytik aims to revolutionize the real estate market by streamlining buying, selling, and renting processes through a digital infrastructure, including platforms like ValuationXchange and PaymentXchange. ValuationXchange, set to go live next month, is projected to generate annual revenues of up to RM16.5 million, based on a pay-per-use model. Should it fully penetrate its serviceable addressable market (SAM) through referral fees, the upside to the target price could increase by up to 29%, adding significant value not yet fully factored into current estimates.

Investment Outlook

AmInvestment Bank maintains its “Buy” rating. The target price of RM0.25 (representing a 25.0% upside from the last traded price of RM0.20) is based on a target PE of 24x and FY27F EPS. The bank anticipates a re-rating of the stock back to its historical average, driven by expectations of record earnings and the strong potential of its AI venture. The bank emphasizes that its current forecasts do not yet fully incorporate the potential impact of the AI venture, suggesting further upside potential not reflected in current estimates.