Agmo Holdings (Agmo), a digital solutions and application development specialist, is making its debut on Bursa Ace Market today. The Company has cumulated 10 years of experience in mobile applications. The mobile and web app development industry is expected to continue its strong growth trajectory. Coupled with the implementation of digital transformation initiatives by the Government Malaysia and Singapore, we expect Agmo to register net earnings of RM7.4m and RM9.0m for FY3/23 and FY3/24 respectively. BUY with a TP of RM0.42 premised on 15x PER, 50% discount to Bursa Malaysia Technology Index 5 years average given its smaller market capitalisation.

Agmo’s solutions is involve digitalising its customers’ business operations through the development of mobile and web applications as well as provision of digital platform-based services such as (i) Development of mobile and web applications; (ii) Provision of digital platform-based services; and (iii) Provision of subscription, hosting, technical support and maintenance services.

Development of mobile and web applications was the largest revenue contributor to our Group as it made up of 78.4% of group’s total revenue, followed by subscription, hosting, technical support and maintenance services at 14.4%; and provision of digital platform-based services’ 7.2% in FY3/22.

According to an independent market research by Smith Zander International SB, the size of the mobile and web app development industry in Malaysia and Singapore is represented by the sales revenue of mobile and web app development. The sales revenue of mobile and web app development in Malaysia increased from RM269.1m in 2018 to RM514.2m in 2021, at a CAGR of 24.1%, while the sales revenue of mobile and web app development in Singapore, increased from USD18.1m in 2018 to USD37.0m in 2021, at a CAGR of 27.0%.

The mobile and web app development industry is expected to continue on its strong growth trajectory, driven by digitalised consumer behaviour and attachment to mobile devices to perform daily activities. Ongoing digitalisation of businesses for business sustainability in the rapid changing business environment spearheaded by digital transformation initiatives by the Government of Malaysia and the Government of Singapore should underpin future growth.

Source: Rakuten Research - 18 Aug 2022