Infoline Tec Group Berhad - Cease coverage
Fri, 01-Aug-2025 07:29 am
by Jayden Tan • Apex Research

Counter

INFOTEC (0253)

Target Price (RM)

N/A

Recommendation

Not Rated

  • We cease coverage on Infoline Tec with immediate effect due to internal resource reallocation.

  • Near-term results are expected to remain sluggish, impacted by project delays, higher operating costs, and competitive pricing, with recovery likely after its largest customer completes its restructuring and resumes Asia expansion.

  • Recommendation reclassified from HOLD to NOT RATED. Last TP: RM0.65 (13x FY27F EPS of 5.0 sen). However, investors should no longer rely on our previous earnings forecasts and target price when making investment decisions.

 

Cease coverage. We are ceasing coverage on Infoline Tec with immediate effect due to the reallocation of internal resources. As such, we will no longer update our financial forecasts, and investors are advised not to rely on our previous earnings forecasts and recommendations when making investment decisions.

 

Outlook. In the near term, we anticipate Infoline’s results to remain sluggish, weighed down by project delays stemming from US-China trade tensions, elevated operational costs, and competitive pricing pressures in the IT infrastructure segment. While recurring revenues from managed services and cybersecurity offerings provide some earnings visibility, growth prospects remain constrained. In our view, a more meaningful recovery timeline would likely coincide with its largest customer, Dell, completing its headcount restructuring and resuming expansion plans across Asia.

 

Valuation. We are reclassifying our recommendation from HOLD to NOT RATED following this cessation of coverage. Our last target price for the company was RM0.65, based on a 13.0x P/E multiple applied to the FY27F EPS of 5.0 sen. However, investors should no longer rely on our previous earnings forecasts and target price when making investment decisions.

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Disclaimer

The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.

Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.

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