KUALA LUMPUR (Feb 13): REDtone Digital Bhd shares surged by as much as 10 sen or 10.3% to RM1.07 — its fresh record high since 2009 — extending the year’s rally following the recent announcement of securing a contract worth RM398.1 million for MyGovUC 3.0.

The counter was among top gainers by value on Bursa Malaysia on Tuesday, with trading volume at 10.43 million so far, more than tripled its average 65-day trading volume at 2.82 million shares.

At the time of writing, the counter was trading at RM1.05, still up eight sen or 8.25%, giving it a market capitalisation of RM1.05 billion.

The counter had been on a steep climb year-to-date, appreciating 50% or 35 sen. Over the past one year, the counter saw a whopping 92% or 51 sen jump in its share price.

At its current share price, the counter is trading at historical price-to-earnings ratio of 16.56 times. It does not have any analyst coverage.

REDtone announced on Feb 6 that it had secured the MyGovUC 3.0 contract worth RM398.1 million from the Malaysian Administrative Modernisation and Management Planning Unit (Mampu) to provide unified communications solutions.

The contract is for a period of 60 months beginning February 2024.

For the contract, REDtone is opting for cloud computing solutions and services from AwanBiru Technology Bhd (Awantec), with a service agreement worth RM294.27 million.

The agreement spans a duration of 57.5 months, from Feb 14, 2024, to Nov 30, 2028.

REDtone Digital is indirectly 40.79%-owned by Berjaya Corp Bhd, while the King of Malaysia Sultan Ibrahim Sultan Iskandar holds a 17.34% stake.

In the first quarter ended Sept 30, 2023, (1QFY2024), REDtone's net profit fell 80% year-on-year to RM2.72 million from RM13.95 million, even as revenue rose 31.2% to RM55.18 million, from RM42.05 million.

The decline in profit was due to a swing to fair value loss of RM6.08 million on investments, compared with fair value gain of RM4.64 million the year before.

Operating profit slipped 7% to RM11.41 million, from RM12.27 million, on higher general and administrative expenses.

The group is expected to release its 2QFY2024 results on Feb 21, according to Bloomberg data.