LGMS: To gain interest?

Cybersecurity bill to be enforced. The Cybersecurity Bill, gazetted on June 18, is progressing towards implementation. According to The Star, the National Cyber Security Agency (NACSA) is working full swing to see through its implementation. Currently awaiting regulatory approval and additional manpower allocation, NACSA’s CEO expects that they will be ready to proceed as soon as these measures are finalized. Once enacted, we believe the implementation of the bill is likely to drive interest in cybersecurity companies. To recap, the bill sets cybersecurity standards that organizations classified as National Critical Information Infrastructure (NCII) must comply with. Non-compliant companies may face fines and their directors could be subject to imprisonment.

LGMS is likely to be a prime beneficiary. Among the cybersecurity companies listed on Bursa Malaysia, LGMS stands to be a prime beneficiary, anchored by its three core business pillars: (i) cyber risk prevention services; (ii) cyber risk management and compliance services; and (iii) cyber threat and incident response services. Notably, LGMS specializes in vulnerability assessments and penetration testing to identify cyber threats and vulnerabilities, offering targeted recommendations to address these issues. It is worth noting that that these services are rarely a one-time effort. With this, the growing needs of cybersecurity infrastructure plays to the advantage of LGMS, which has been accredited with multiple international certifications and recognitions.

StarSentry to lead growth. The timely launch of the StarSentry product positions the group to capitalize on the upcoming demand surge. Designed primarily for SMEs, StarSentry offers a plug-and-play solution that seamlessly integrates into users' networks, analysing all connected devices for vulnerabilities. As a made-in-Malaysia platform, it is expected to generate strong interest and positively impact the group, especially considering that 84.7% of Malaysian SMEs experienced cyber threats in 2022.

Building a base. LGMS is building a base at strong support region of RM1.30-1.42, with indicators showing uptick bias. A successful breakout above RM1.55 will spur the share price toward RM1.60-1.67-1.75 levels. Cut loss at RM1.24.

Collection range: RM1.30-1.35-1.40

Upside targets: RM1.55-1.67-1.75

Cut loss: RM1.24

Source: Hong Leong Investment Bank Research - 22 Aug 2024