• Revenue reached a new high in FYE 2021 with RM 44 million. This show that the company's market share is expanding in the market.
• The gross profit margin reaches its highest which is 38.20% (FYE 2021). The GP margin decreased in FYE 2019 due to the company offering more competitive pricing to the new customer from the banking sector, to establish a business relationship with the customer. In the IT infrastructure solution segment, a higher subcontractor cost was incurred for the projects that were undertaken during the year. (Generally, a GP margin of 20% is considered high/ good).
• PAT margin grow from 16.1% (FYE 2018) to 17.5% (FYE 2021)
• The gearing ratio is 0.01 times (FYE 2021) mainly due to the increase in the total equity with the PAT of RM7.80 million recorded in FYE 2021. The management team may increase the debt therefore to maximize the resource utilize under a healthy stage.  (A good gearing ratio should be between 0.25 – 0.5). 

Major customer and Supplier 

Industry Overview

• storage systems that enable storage and backup of digital data;
• network systems that allow for interconnectivity; and
• communication systems that allow users to communicate and collaborate through different avenues such as e-mail, video conferencing, and voice over internet protocol.

1. The company intends to enhance the facilities and services to increase the capacity and capabilities for providing managed IT services
2. The company intends to set up a technology centre and a disaster recovery centre to improve its sales and marketing activities and strengthen its presence in Malaysia
3. The company plans to expand its geographical presence in Malaysia and in international markets

MQ Trader View 

1. Low debt company. As the gearing ratio is 0.01 times, the company can avoid any unexpected accident, especially since the BNM is ready to increase the OPR rate at this period. 
2. Strong financial result. The company revenue keeps growing and maintains the growth in gross profit margin and net profit margin.
3. The management team has a full plan for expanding the business. For example, enhance the facilities and services to increase the capacity and capabilities for providing managed IT services, set up a technology centre and a disaster recovery centre to improve its sales and marketing activities, and strengthen its presence in Malaysia.

1. High customer concentration risk. The company is highly relying on a few companies, especially the top 1 customer. This will cause the company to face high customer concentration risk, and it will cause a serious result when the customer swaps the service to another company and expands its geographical presence in Malaysia and in international markets.

Click here to refer back on the IPO - Infoline Tec Group Berhad (Part 1)