KUALA LUMPUR (Dec 26): Shares of SNS Network Technology Bhd (KL:SNS) rose 17.5% in active trade on Thursday amid broader gains in the sector following the Christmas Eve rally of US technology stocks.
SNS, which distributes a wide variety of information and communication technology hardware and software, saw its shares surge 14% in the morning session to pause at 65 sen for midday trading break.
In the evening trading session, the stock moved up further to close at 67 sen. It was the third most actively traded counter on Bursa Malaysia after more than 74.5 million shares changed hands.
SNS shares have nearly tripled this year. Rakuten Trade, the sole research house covering SNS, has the stock on ‘buy’ call with a target price of RM1.23 in July, citing its exposure to an upcycle in artificial intelligence (AI) and data centres.
At its last price, the company has a market capitalisation of over RM1.08 billion, and was valued at more than 32.5 times its trailing earnings, close to the much-larger ITMAX System Bhd (KL:ITMAX) price-to-earnings ratio of 47.8 times.
The trailing return on equity (ROE) of SNS, however, was also the lowest at 14% compared to that of the same peers. The trailing ROE on VSTECS was 16.3%, followed by ITMAX at 22.7%, Infomina at 27.6%, and SMRT at 33.8%.
On Dec 10, SNS reported a five-fold rise in its third quarter net profit to RM10.2 million from RM2.02 million a year earlier, on improved margins and sales in both online and physical store channels amid higher demand for its products.
On Dec 7, SNS signed a three-year partnership with Mimos Bhd to boost AI innovation and software testing capabilities. The partnership was aimed at exploring collaboration on independent verification and validation services, as well as developing practical AI use cases for an AI factory.