KUALA LUMPUR (June 25): Shares in Systech Bhd (KL:SYSTECH) rose to their highest in nearly six months on Tuesday after the information technology services firm entered into a deal to develop and operate data centres.
Systech rose as much as 10%, or 4.5 sen, to 48.5 sen in morning trading, its highest since Jan 12. However, the stock later pared gains to close unchanged at 44 sen, valuing the company at RM282.76 million.
More than 40.33 million shares changed hands, nearly eight times the trading volume’s 200-day moving average.
On Monday (June 24), the IT services firm said it plans to develop and operate data centres together with Eh Integrated Systems Sdn Bhd (EISSB), which offers industrial-grade servers and storage solutions.
Under the partnership, Systech said it will develop essential applications and software for data centre operations including design, coding, testing and deployment.
It said that EISSB, on its part, will procure the necessary equipment and infrastructure for the joint venture, which encompasses graphics processing units, servers, storage systems, networking equipment, cooling systems and power supply units.
According to Systech, the two-year agreement has no fixed value, as the terms depend on the revenue generated.
Systech has been in the red over the past five financial years. For the financial year ended March 31, 2024 (FY2024), Systech reported a net loss of RM5.55 million, compared to a net loss of RM5.98 million in FY2023. The loss is attributable to higher administrative and operating expenses as well as impairment of goodwill.
Annual revenue climbed 44% to RM25.13 million from RM17.45 million, mainly contributed by corporate solution services including digital transformation and automation.
As at March 31, 2024, the company was in a net debt position with current liabilities of RM19.74 million, and cash and cash equivalent of RM5.36 million. Its gearing ratio was relatively low at 0.08 times.