KUALA LUMPUR (May 20): Information and communications technology distributor VSTECS Bhd (KL:VSTECS) posted a 28.9% rise in first-quarter net profit, driven by stronger demand for AI-related data centre infrastructure projects and higher purchases ahead of anticipated price increases.

Net profit for the quarter ended March 31, 2026 (1QFY2026) rose to RM22.88 million from RM17.75 million a year earlier, while revenue surged 51.4% to RM1.05 billion from RM691.67 million, according to the company’s filing with Bursa Malaysia.

The group’s enterprise systems segment was the largest growth driver, with revenue jumping 75% year-on-year (y-o-y), supported by higher deliveries for AI-related data centre infrastructure and public sector projects.

Its ICT distribution segment also maintained strong momentum, recording a 40% y-o-y increase in revenue on sustained demand for devices and higher purchases by consumers and channel partners ahead of expected price hikes.

Meanwhile, the ICT services segment posted an 11% y-o-y increase in revenue, supported by higher demand for services and cloud subscriptions.

Chief executive officer JH Soong said in a statement that the group expects its enterprise systems division to remain a key growth catalyst this year, underpinned by continued public sector technology investments and growing demand for AI-related data centre infrastructure.

“Demand for AI-related DC infrastructure is gaining traction and we expect contributions from this segment to increase progressively as more data centres are commissioned,” he said.

Soong noted that temporary supply chain disruptions arising from the global memory chip shortage had extended shipment lead times for server and storage equipment, although underlying demand and the group’s order pipeline remain healthy.

He added that the ICT services segment is expected to benefit from rising enterprise deployments, which are driving demand for integration, maintenance and managed services, while cloud subscriptions continue to form a growing recurring revenue base.

On the consumer side, Soong said the ICT distribution segment is benefitting from broader technology adoption among younger consumers and rising ownership of multiple connected devices across education, work and entertainment.

“The coming wave of next-generation AI-enabled consumer devices is expected to drive further adoption, reinforcing the ICT distribution segment’s role as an important pillar of the group,” he said.

According to Soong, global enterprises are increasingly shifting from AI experimentation towards commercial deployment, with Malaysia approaching a similar inflection point.

“Emerging trends such as tokenisation are expected to drive significantly higher AI usage and compute consumption over time. Having established the necessary building blocks across infrastructure, solutions and services, VSTECS is strategically positioned to capture long-term opportunities arising from the expanding AI ecosystem,” he added.

Separately, VSTECS’ proposed a two-for-one bonus issue, which will go ex on June 5, with the entitlement date fixed for June 8.

Shares of VSTECS closed 18 sen or 3% lower at RM5.75 on Wednesday, giving the group a market capitalisation of RM2.07 billion. The stock has gained 78% over the past year and is trading near record highs.