MORNING CALL:23/11/23 - video Dailymotion

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11/22/2023

Apex thinks it has a lock on Infoline Tec Group

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00:00 Good morning, we have a new beat today as Apex Securities initiates coverage on IT Infra

00:06 and cybersecurity expert Infoline Tech Group or Infotech with a buy call and RM1.15 target

00:13 price.

00:14 Let's break down the rationale.

00:15 Apex believes that Infotech is riding the rapid pace of technological evolution.

00:20 It is also strategically positioning itself within this high growth industry.

00:25 As according to IMR forecast, the IT infrastructure industry is expected to grow at a Compound

00:30 Annual Growth Rate or CAGR of 9.7% and 18.4% year-on-year in 2024 in Malaysia and China

00:38 respectively.

00:39 Geographically, Infotech has expanded its operations into China, establishing a presence

00:44 across three cities in response to strong demand inquiries.

00:48 Additionally, it has also extended its footprint to Singapore, Japan and India.

00:53 The company has bolstered its steady earnings stream through managed IT services segment

00:57 in a bid to generate recurring income streams.

01:01 Infoline maintained a mutually long-term working relationship with Dell Technologies, which

01:05 is the group's largest customer.

01:07 And Apex reckons that Infoline is well positioned to capitalize on the ongoing and future Dell

01:12 developments within the Asia-Pacific markets.

01:15 Infoline also boasts a healthy balance sheet with zero borrowings and a net cash position

01:18 of 37.9 million, representing 10.42 cent per share or 13.3% of current share price.

01:25 According to Bloomberg, only Apex Securities covers Infoline tech, so based on the RM1.15

01:30 target price, this implies a possible upside of 44% based on its last close of 80 cent.

01:36 Thanks for watching.

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