Infoline Tec Group Berhad - Security Operating Center Upgrade
Fri, 21-Jun-2024 08:06 am
by Jayden Tan • Apex Research

Counter

INFOTEC (0253)

Target Price (RM)

0.905

Recommendation

Hold

  • Upgrading Security Operation Center (SOC) into Infoline Cyberwatch Center. Infoline has upgraded and enhanced its current Security Operations Center (SOC), now named as Infoline Cyberwatch Center. To recap, the Group established SOC in 3Q23 to facilitate the monitoring and management of cyber threats and attacks.

  • Comprehensive suite of services in the center. With the new enhancements, Infoline Cyberwatch Center now offers a comprehensive range of services including Threat Intelligence, Digital Forensics and Incident Response, Fraud Prevention, Penetration Testing and Security Assessment, Intellectual Property Protection, Consulting and Advisory, Cyber Crime Investigations, and Managed Security Services.

  • Key technology partners. Infoline Cyberwatch Center partners with international cybersecurity specialists Group-IB, LogRhythm, and Recorded Future, leveraging their technology to provide enhanced cybersecurity services and solutions to customers by improving monitoring capabilities, automated response mechanisms, security measures, and operational efficiency.

  • Riding onto rising demand of cybersecurity. The Cybersecurity Bill 2024, passed by the Malaysian government in March 2024, marks a pivotal milestone in promoting cybersecurity within the country. The bill introduced requirements for designated entities within 11 sectors to comply with, fostering a heightened focus on cybersecurity. We anticipate Infoline will benefit from the increased demand for cybersecurity solutions as entities work to better protect their digital assets.

  • Growing managed IT segment. With the enhanced SOC and the Group’s efforts to grow this segment through aggressive pricing strategies, we expect to see increased contributions from this segment, going forward. We view this positively as the segment provides steady recurring revenue and sustainable growth.

  • Valuation. We have not made any changes to our earnings forecast for FY24F and FY25F while we evaluate the impact and contribution from the enhanced SOC. We downgrade our recommendation on Infoline to HOLD with an unchanged target price of RM0.905 following the recent share price appreciation.

  • Risk. Revenue growth lags behind escalating costs due to expansion.
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