KUALA LUMPUR (March 2): OGX Group Bhd may have an over 45% upside from its inital public offering (IPO) price as the IT infrastructure firm capitalises on the Malaysian government’s digitalisation push and rising artificial intelligence (AI) adoption, said RHB Research.
OGX, with its one-stop platform spanning network, cybersecurity, and DC verticals, positions it to capture cross-vertical IT spending from its growing system integrator customer base, the research house said in a note recommending investors to subscribe to the company’s shares.
“The government’s MyDigital and Jendela initiatives are sustaining demand for network infrastructure updates across the public sector, while AI adoption is driving a new wave of on-premise data centre investment as organisations prioritise latency management and data sovereignty,” RHB said.
The Shah Alam-based company sells multi-brand products and services, focusing on network, cybersecurity, and enterprise data centre solutions.
The research house has a target price of 51 sen for OGX versus its IPO price of 35 sen per share. Applications for the IPO closed on Monday (March 2), with the stock scheduled to be listed on the ACE Market next Wednesday.
OGX plans to use the IPO proceeds to fund its next phase of growth, including the acquisition of a new headquarters, broadening its portfolio of infrastructure brands, and setting up a new sales office in East Malaysia.
While optimistic about its long-term outlook, RHB flagged potential short-term headwinds. “We forecast FY2027 margin compression as the new headquarters, East Malaysia expansion, and security operations centre costs are absorbed, before recovering in FY2028 as operating leverage kicks in,” RHB said.
The research house forecasts an earnings growth at a compound annual growth rate of about 26% over the next three years, with above 20% margins as the company continued its product mix shift towards higher-margin cybersecurity and warranty services.
RHB's 51 sen TP is based on a 15x forward price-to-earnings multiple, which it noted is a slight discount to industry peers to account for OGX’s smaller market capitalisation.