Maintain BUY and TP

The recent investors briefing by Ramssol provided greater clarity on the group’s roadmap. Ramssol introduced several key pillars that will drive its growth ahead, all of which are a good mix of stable and low-risk, high-risk strategies with strong growth potential, as well as complementary that could lead to cost savings. Maintain BUY with an unchanged TP of MYR0.50, pegged to 12.7x FY23E PER.

PeopleTech – the bread and butter HCM business

With an orderbook size of MYR55-60m, or revenue cover of up to two years, this segment has strong visibility. Ramssol has identified several key MNC and GLC players, including companies based in other SEA countries for the implementation of Oracle, DarwinBox and Laiye’s HCM and back office solutions. Elsewhere, it is also pushing for more B2B2C partnerships for its proprietary employee engagement app Feet’s, with a target to reach 1 million registered users by end-23, from 120k in 2022.

EduTech - growing anti-corruption awareness

Ramssol has the exclusivity to run enforcement and compliance-related trainings for government agencies on behalf of MACA under the latter’s EXCEL program. While yet to be made mandatory, the group is hopeful that these trainings would gain traction across GLCs, MNCs, PLCs and even SMEs, given the rising awareness of anti-corruption compliance matters. The total addressable market is attractive given the large amount of entities it can tap into for the training.

AutoTech – high-risk, high-reward segment

RiderGate (RG) is Ramssol’s attempt to penetrate into the automotive industry through the development of a digital marketplace for the motorcycle market. It had recently raised c.MYR7.2m through a private placement exercise to fund the development and other related expenses of the platform. The 1st phase of RG could complete by 2Q23, in which the group could immediately monetise through the transaction of new and used motorcycles done on the platform. The sales proceeds can then be recycled for further development phases and strengthen its position as the first mover in the market. Overall, we make no changes to our estimates for now; we have projected the revenue mix from both EduTech and AutoTech to grow from 0% in FY22E to 25/34% in FY23/24E.

Source: Maybank Research - 13 Jan 2023