Kenanga Research starts coverage of LGMS, target price at RM1.50

KUALA LUMPUR (Oct 27): Kenanga Research has initiated coverage of cybersecurity penetration testing company LGMS Bhd with an "outperform" rating at RM1.18 and target price (TP) of RM1.50.

In a note on Thursday (Oct 27), the research house said LGMS thrives in both economic boom and down cycle.

It said that for instance, the 2008 economic downturn resulted in cybercrime hitting a record high in the US while an economic boom is expected to drive the adoption of digitalisation and in turn increase demand for cybersecurity.

“A fascinating fact is that the group’s impressive revenue growth of 17.6% CAGR in the last three years was achieved by word of mouth from customers and partners such as Alibaba Cloud, TIME dotCom, Measat, and top commercial and investment banks in Malaysia.

“With the IPO proceeds, the group will expand its talent size, regional presence and launch its new blockbuster product (Project Mercury).

“We initiate coverage with an 'outperform' call and a TP of RM1.50,” it said.