• Infomina Berhad (Infomina) has been awarded a three-year contract valued at approximately RM49.39mn by the Home Ministry. The contract entails providing maintenance and support services to the core business system of the National Registration Department.

• We are positive with this Turnkey contract, which expands the orderbook by 10.3%. It underscores Infomina's proficiency in mainframe and IT transformation and highlights their strong government agency partnerships.

• We maintain our earnings estimates as this is within our initial orderbook assumptions.

• Reiterate our BUY call on Infomina at TP of RM1.90, derived based on 22x PER (15% discount to 5-year sector average of 25.9x) and CY24F EPS of 8.6sen

Secured 3-Years Turnkey Contract from Home Ministry

Infomina has successfully secured a three-year contract valued at approximately RM49.39mn from the Home Ministry. The contract involves providing comprehensive maintenance and support services for the National Registration Department's core business system, known as Business Utama ICT. These services encompass enhancements, upgrades, and new application development, which include activities such as requirements analysis, application and system testing, technical support, and the nationwide deployment of relevant applications. The contract will be effective from 1 November 2023 to 30 October 30 2026, and was officially accepted by Infomina following the receipt of the SST (Surat Setuju Terima) from the ministry on the 3 November 2023. Any potential renewal of the SST in the future is contingent on the award of a new SST by the ministry.

Our View

We are positive with this Turnkey contract as it will grow its existing orderbook by 10.3% to RM529.49mn from RM480.1mn. We see this contract as strong evidence to Infomina's expertise in mainframe and IT transformation, showcasing their close collaboration with government agencies. In the public sector, Infomina primarily serves Malaysian government agencies and statutory bodies such as the National Registration Department and Road Transport Department Malaysia, contributing 30.2% of the revenue in FY23.

Earnings Forecast

No adjustments were made to our FY24-25F earnings projections, which already account for our orderbook assumptions.

Maintain BUY Call with unchanged TP RM1.90

Maintain a BUY call with unchanged TP of RM1.90 pegged at 22x PER (15% discount to 5-year sector average of 25.9x) and CY24F EPS of 8.6sen. The discount applied is taking into consideration the potential downside risks associated with the recent US banking crisis, particularly considering the group's significant exposure in the financial industry.

Source: BIMB Securities Research - 6 Nov 2023