Ramssol Group Bhd (“Ramssol”) in FY21, recorded revenue of RM52.5m, a 100% increase y-o-y attributed by higher adoption of its HCM solutions especially for virtual communication as companies are working towards digitalisation during the lockdown. Whilst Ramssol is focusing on reselling the HR solutions, it is also branching into Edu Tech which predominantly focus on human capital training as it will provide additional revenue stream and enhance its earnings base. With that, we forecast Ramssol to register earnings of RM9.5m and RM11.4m in FY2022 and FY2023 respectively. BUY with target price of RM0.61 based on 12x PER (slight discount to peers’ average) over FY23 EPS with a potential upside of more than 70%.

The pandemic lockdown in 2021 has caused delay venturing into the Philippines. Nonetheless, it has been aggressively expanding its products and services range into Thailand and Indonesia. In February 2022, Ramssol was appointed by DarwinBox, a multi-billion dollar HMC company in India as an exclusive reseller in Malaysia. Similar to its software reseller product’s Oracle, DarwinBox aims at the small medium enterprises’ HCM solution.

Ramssol’s Edu Tech venture started in December 2021 via a partnership with ELMU V Sdn Bhd to promote co-operation in the conduct of legal framework, corporate liability, corruption risk management and organizational anti-corruption plan course. Under the agreement, Ramssol has the exclusive rights to market and sell the training courses. Ramssol is awaiting approval from MOE to onboard all local universities to compulsory enrol on the course.

While Edu Tech could potentially contribute equally to its revenue, contributions from HCM is still on the rise attributed by new clients and cross selling of its expanded products and services. According to management, Darwinbox - HCM application for the SME have been gaining traction. Moreover, Ramssol could also cross sell other HCM Technology Applications such as Feet’s and Lark to its clientele.

Ramssol has a healthy balance sheet with net cash position of RM4.9m.

Source: Rakuten Research - 20 Jul 2022