• Infomina Berhad (Infomina) has been awarded a five-year contract valued at approximately US$11.39mn (RM53.6mn) from a bank in Thailand. The contract entails providing information technology (IT) support services.

• We are positive about this renewal contract, which expands the orderbook by 14.1%. It underscores Infomina's proficiency in IT support services and highlights its prominence in regional financial institutions.

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

• Reiterate our BUY call on Infomina at TP of RM1.78, derived based on 23.4x PER (10% discount to weightage sector average of 26x) and FY25F EPS of 7.6sen.

Secured 5-Years Renewal Contract from bank in Thailand

Infomina has secured a five-year contract renewal valued at approximately RM53.6mn from a bank in Thailand. This contract is effective from 1 June 2024 until 21 December 2029. It involves providing IT support services under the Renewal segment, encompassing technology application, infrastructure operations, maintenance, and support services.

Our View

We are positive with this contract renewal as it will expand its existing orderbook by 14.1% to RM433.1mn from RM379.5mn. We believe this segment will maintain a 30% gross margin for the next few years. Additionally, the contribution from financial services is expected to remain robust following the recent contract renewal. As of the 9MFY24, the revenue breakdown for financial services institutions stands at 52.1%.

Earnings Forecast

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

Maintain BUY Call with unchanged TP RM1.78

We maintain a BUY call with an unchanged TP of RM1.78. Our valuation is pegged at 23.4x PER (10% discount to weightage sector average of 26x) and FY25F EPS of 7.6sen. The discount accounts for potential downside risks related to contract drawdowns from Renewal customers and lower-than-expected contracts from the Turnkey segment.

Source: BIMB Securities Research - 24 Jun 2024