Info-Tech Systems, the first company to list on the mainboard last year, went IPO at 87 cents. The share price dropped to as low as 76 cents before a rebound up after it announced a positive profit guidance on Jan 21.
As stated by the software company, its FY2025 earnings will be a "considerable increase" versus that of the preceding FY2024 ended Dec 31 2024.
Info-Tech Systems attributes the better numbers, which will be reported on Feb 24, to higher Academy revenues generated in 2HFY2025, as well as continued growth in its HR management and accounting systems.
The CGSI analysts note that the company has been expanding the number of courses it is teaching from 5 as at the end of 2024 to 13 now. Besides HR and accounting topics, newer courses are in applications of AI in business contexts, which they believe will generate better appeal and drive higher-than-expected revenue.
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Kande and Tan currently project that the company will report FY2025 core earnings of $14 million, which they say could "positively surprise".
This implies that the company's final dividend, in line with its 50% payout ratio policy, could better the interim payout of 1.55 cents, which will raise the yield to nearly 5%.
In the near term, the company has a new customer relationship management product to be introduced, which they view as a "positive" signal, an affirmation by the company's management is executing as guided.
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The analysts expect the company to tap its existing base of more than 25,000 customers to cross-sell this new product.
Kande and Tan estimate that the CRM product can generate around $3 to 4 million in revenue in the current FY2026 and grow further thereafter.
"We reiterate our 'add' call on Info-Tech for its growth trajectory, underpinned by deeper market penetration and greater adoption of new products," the analysts say.
Their target price of $1.10 is based on 17x FY2026 earnings, which is a discount of around 50% to the global peers because of Info-Tech's smaller size.
Info-Tech Systems shares gained 7.89% to trade at 82 cents ahead of the lunch break.
