Investment Highlights

• Microlink Solutions (Microlink) is an established technology solutions provider with over 27 years of experience that offers tailor-made information technology solutions to various industries, including financial services, public sector, telecommunications and trading/distribution.

• With a strong legacy in the financial services industry, Microlink aims to expand its expertise in the telecommunications and public sectors by localising and developing more products alongside its own intellectual property (IP).

• Microlink has been recognised as one of Huawei’s 5 authorised system integrators, successfully implementing Huawei Business System Support (BSS). We view this achievement as solidifying Microlink's partnership with Huawei and a testament to its robust delivery prowess. In addition, it opens up promising opportunities to engage with potential telecommunications customers in the region.

• Building on the proven delivery track record, Microlink has rapidly expanded its presence alongside Huawei in the GCC region, starting with Saudi Telecom Company (Bahrain), the largest telecom provider in the area.

• Microlink also provides niche Islamic banking solutions to Bank Islam Brunei Darussalam AT-Tamwil (BIBD) and Koperasi Co-opbank Pertama Malaysia. With a business partnership of over 20 years, Microlink has established a strong foundation to secure contract extensions, specifically for upgrades and maintenance services, which will underpin the group’s recurring income stream growth.

• Microlink's expansion into the public sector presents prolific growth opportunities. With a robust pipeline of RM2.1bil (8.5x FY23 revenue) in public sector projects and unbilled order book of RM100mil, Microlink is well-positioned to capitalise on ongoing digitalisation trends.

• This is underscored by the group recently securing a 3-year contract worth RM29mil from the National Audit Department to design, develop and deliver a data warehouse, audit analytics application, audit dashboard and other supporting infrastructure.

• From FY19 to FY23, Microlink registered a remarkable core earnings CAGR of 196% with a minimal net debt of RM6mil as at 31 March 2023. In FY23, Miicrolink’s revenue grew 14% YoY to RM248mil from a significant increase in financial services (+2.5x YoY).

• While Microlink’s FY23 PE of 37x appear pricey vs peer Silverlake Axis’ 24x, this could be supported by faster growth from the award of public sector contracts amid a substantive prospective pipeline.

Source: AmInvest Research - 20 Jul 2023