KUALA LUMPUR (May 20): ICT Zone Asia Bhd (KL:ICTZONE) is well-positioned to capitalise on Malaysia’s digitalisation wave, said analysts covering its ACE Market listing with at least 44% upside seen to its initial public offering (IPO) price of 20 sen per share.
ICT Zone, which is set to transfer from the LEAP Market to the ACE Market on June 3, is a provider of ICT solutions with financial services, ICT product trading, cloud services, and device-as-a-service (DaaS) through its various brands.
“With a market share of less than 10% in the government-linked leasing space, ICT Zone has significant room to scale through its integrated leasing solutions,” said Tradeview Research in initiating a “buy” call on the stock.
According to the research house, 70% of the company’s leasing solutions’ segment revenue is derived from government-linked projects, therefore, it sees that artificial intelligence (AI) personal computer upgrade trend could drive new or renewed contracts for the company.
“We project 25-40% revenue growth for the financial year of 2025 forecast (FY2026F) to FY2028F, driven by RM21 million IPO [initial public offering] funded capex to expand leasable assets and new and renewed customer contracts,” Tradeview said in a note on Monday.
Tradeview’s target price of 29 sen represents a 44% upside, based on a FY2027 price earnings of 13 times, comparable to peers, given its robust earnings growth from better product mix and slight premium to the non-bank financial institutions due to lower gearing, added Tradeview.
RHB Research, meanwhile, has assigned a fair value of 30 sen per share based on 12 times forecast FY2027 earnings, indicating a potential upside of 51% from its IPO price of 20 sen, it said in an IPO note on Tuesday.
"Backed by a record-high order book that is worth nearly two times its FY2025 revenue, we forecast a robust 47.5% compounded annual growth rate for FY2025-FY2028," said RHB Research.
"Its recurring income model and superior ROE makes its market valuation of 7.9x FY2027 P/E compelling," it saidl.
The company is seeking to raise up to RM26.6 million from the issuance of 154 million new shares, representing 16.72% of its enlarged share capital. Upon transfer to ACE Market, ICT Zone is projected to have a market capitalisation of RM159 million.