Syahril’s target price is pegged to a forward PE multiple of 15.5 times on estimated FY27 earnings. The valuation also reflects a 15% discount to regional peers given the relatively small size of Info-Tech Systems.
“ITSL’s key strength lies in its ability to build and maintain a locally compliant, integrated payroll engine across four markets,” writes Syahril, referencing the company’s operating markets: Singapore, Malaysia, Hong Kong and India.
According to forecasts cited by RHB, the addressable market in these four countries is expected to grow by 8% CAGR to US$4.65 billion in 2028, up from US$3.69 billion. RHB expects ITSL to outperform the forecast and deliver a higher revenue CAGR of 10.5%.
As compared to its competitors, ITSL products offer relatively affordable pricing for SMEs given the breadth of its software offerings. “While not the cheapest option, we view ITSL’s pricing as highly attractive given the breadth of its HRMS and payroll suite,” Syahril writes.
In addition, Syahril believes Info-Tech Systems will enjoy favourable policy support for its software products. Specifically, changes in regulatory requirements will create a “recurring compliance burden” on SMEs who have to tap on software that is regularly updated. “We believe ITSL is well positioned to capture sustained growth given its localisation expertise, compliance‑first platform, and established regional presence.”
Overall, RHB is forecasting a core profit CAGR for 12.3% for FY25 to FY28. This is driven by Info-Tech Systems’ growing user base for its existing HRMS and accounting software products across its operating markets. Syahril is forecasting higher core profit margins of 32.4%, 32.7% and 33.4% for FY26 to FY28, up from 31.9% in FY25, based on the asset-light nature of Info-Tech Systems’ business.
Shares of Info-Tech Systems are trading up by 2% at $1.02 as at 10.43 am.
