• Maintain BUY. TP (RM1.78). Infomina’s 2QFY24 core PATAMI of RM16mn was below our and market expectations, making up only 33.3% and 36.5% respectively of full year forecast. This lower-thanexpected result was attributed to reduced earnings from the Turnkey segment. Despite this, revenue and operating profit experienced a 6.1% and 24.9% QoQ increase, thanks to better performance of the Turnkey segment, supported by its impressive order book. We maintain a positive outlook on the group's strategic initiative to expand its presence in North Asia, concurrently strengthening its position in regional countries like Thailand and the Philippines. Leveraging Infomina's R&D and technological expertise, we are optimistic about its ability to effectively secure both turnkey and renewal projects. We cut our FY24/25F earnings by 32%/16.4% to RM32.7mn/RM45.5mn respectively to account for lower revenue. Maintain a BUY call on Infomina, with a lower TP of RM1.78.

• Key Highlight. It's noteworthy that in the 2QFY24, the revenue of the Turnkey segment experienced a substantial 34% QoQ growth. Despite this positive development, the Renewal segment played a predominant role in the overall revenue picture during this quarter, contributing a significant 61.9% to the total revenue. This notable contribution was fuelled by an impressive order book, especially from Thailand and the Philippines.

• Forecast. We cut our FY24/25F earnings forecast by 32%/16.4% to RM32.7mn/RM45.5mn respectively to account for lower revenue.

• Outlook. The group is optimistic about its significant investment initiatives in research, development, and technology expansion. The company is focused on exploring new markets, fostering business growth, and strengthening its brand presence. Notably, the group has recently made a successful entry into the Japanese market and anticipates making a meaningful contribution to the group's revenue in FY24.

• Our call. Maintain a BUY call with lower TP of RM1.78 (RM1.90 previously) pegged at 23.4x PER (10% discount to 5-year sector average of 26x) and FY25F EPS of 7.6sen. The applied discount takes into account the potential downside risks associated with the recent US banking crisis, specifically considering the group's substantial exposure in the financial industry.

Source: BIMB Securities Research - 18 Jan 2024