Ramssol Group Bhd - Indonesia Debut adds a New Gear
Tue, 19-May-2026 07:28 am
by Research Team • Apex Research

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RAMSSOL (0236)

Target Price (RM)

1.41

Recommendation

Buy

  • Ramssol posted 1QFY26 core net profit of RM6.5m (+11% YoY, +64% QoQ), bringing the 3-month tally to 23% of our full-year FY26F forecast of RM28.7m and 22% of consensus (RM29.3m). We deem the results broadly in line, given the typically stronger Q2-Q3 weighting. 

  • Core earnings rebounded strongly QoQ (+64%) from a seasonally weak 4QFY25, bolstered by: (i) sustained momentum in PeopleTech (RM11.5m revenue), driven by continued demand for HCM solutions such as Darwinbox and HONO; (ii) A.I.Tech's expansion into Indonesia contributing RM7.5m in revenue alongside ongoing enterprise AI projects in Thailand; and (iii) maiden revenue contribution from AutoTech following the deployment of 500 electric motorcycles for a leading Indonesian superapp.

  • We make no changes to our FY26/FY27F forecasts of RM28.7m/RM32.4m and introduce our FY28F earnings forecasts of RM35.3m. We maintain our BUY rating with a higher TP of RM1.41, derived from applying 20x partially diluted FY27F EPS of 7.1 sen. 

     

Results inline. Ramssol posted 1QFY26 core net profit of RM6.5m (+11% YoY, +64% QoQ), representing 23% of our FY26F forecast and 22% of consensus. The 1QFY26 core earnings figure is taken as reported, with no adjustments required as there were no exceptional items during the quarter (unlike 4QFY25 which required the exclusion of RM3.6m impairment on intangible assets).

 

QoQ. Revenue surged over 4x to RM22.2m from the seasonally weak 4QFY25 (RM5.2m), consistent with the group’s historical pattern of a strong Q1 following a year-end trough. PBT swung to RM8.2m from a loss of RM2.1m in 4QFY25, primarily driven by the recovery in top line. Core PATAMI of RM6.5m compared to RM4.0m in 4QFY25 (after excluding impairment), a 64% improvement.

 

YoY. Revenue rose 23% YoY to RM22.2m (1QFY25: RM18.1m), driven by growth across all three core business pillars. PeopleTech recorded revenue of RM11.5m, underpinned by sustained demand for HCM solutions. A.I.Tech contributed RM7.5m, boosted by the expansion of AI-related opportunities into Indonesia as seen by the recognition of RM3.3m in revenue attributed to Indoneisa during the quarter. AutoTech drove incremental revenue from the deployment of 500 electric motorcycles for a leading Indonesian superapp company. Core PATAMI growth of 11% YoY was more modest than revenue growth, partly due to higher NCI charges of RM1.4m (1QFY25: RM0.01m) reflecting A.I.Tech’s growing profit contribution to minority shareholders.

 

Balance Sheet. The group maintained a net cash position. Cash and deposits stood at RM59.9m (4QFY25: RM49.4m), buoyed by RM9.7m in proceeds from the special issue of shares to Bumiputera investors. Total borrowings were largely stable at RM31.8m. Trade receivables eased to RM41.0m (4QFY25: RM43.5m) while contract assets declined to RM30.8m from RM37.7m, reflecting billings progress on existing projects. Other receivables rose to RM21.9m (4QFY25: RM8.3m), likely related to prepayments or deposits for new project initiatives.

 

Outlook. Ramssol’s outlook remains supported by multi-pronged growth drivers. For PeopleTech, the AmBank EWA collaboration (via “Pay Day Now”) was slated for MOU-to-MOA conversion by end-May 2026, which if executed would unlock a highly scalable, high-margin revenue stream. The Tencent Cloud distributorship adds a complementary revenue vertical to both PeopleTech and A.I.Tech. For AutoTech, Indonesia operations have commenced with the deployment of 500 EV motorcycles, while Rider Gate’s integration with RTD’s MySikap platform should drive transaction volumes in the used motorcycle segment. The group’s orderbook stood at RM170.9m as at end-FY25, providing solid earnings visibility.

 

Earnings Revision. We make no changes to our FY26/FY27F core earnings forecasts of RM28.7m/RM32.4m, as the results were broadly in line. We will reassess our assumptions following the upcoming analyst briefing for more granular segment-level guidance. We also introduce our FY28F core earnings forecast of RM35.3m

 

Valuation. Maintain BUY with a higher TP of RM1.41, derived from applying 20x partially diluted FY27F EPS of 7.1 sen. Our target multiple is justified by: (i) strong double-digit earnings growth trajectory over our forecast period; (ii) strategic positioning to benefit from the region’s accelerating digital transformation via its HCM, AI and AutoTech verticals; and (iii) emerging growth catalysts from the EWA platform and Indonesia expansion. At the current price of RM0.73, the stock trades at ~10.3x FY26F core PE, which we view as undemanding given the structural growth drivers.

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