TA Securities sets 55 sen fair value for Go Hub Capital

KUALA LUMPUR: TA Securities Holdings Bhd has assigned a fair value of 55 sen to Go Hub Capital, which is set to list on the ACE Market on 3 July.

This valuation represents a 57.1 per cent increase from its initial public offering (IPO) price of 35 sen.

In a note, TA Securities expressed optimism about Go Hub’s growth prospects, citing the government's ongoing efforts to advance digitalisation, which are expected to enhance Malaysia’s public transportation infrastructure and systems.

The research firm highlighted that Malaysia's enterprise information technology (IT) services industry is projected to grow from RM23.5 billion in 2024 to RM29.5 billion in 2028, with a compound annual growth rate of 5.7 per cent, driven primarily by digital transformation across various sectors.

"We estimate Go Hub will achieve earnings growth of 19.3 per cent, 33.3 per cent, and 21.7 per cent, reaching RM9.7 million, RM12.9 million, and RM15.7 million for the financial years 2024 (FY24), FY25 and FY26, respectively, supported by its unbilled order book of RM35.4 million as of May 10, 2024.

"A better outlook for the public transportation sector is also expected, with the domestic market remaining the primary revenue generator," TA Securities said.

Go Hub specialises in providing enterprise IT services, particularly transportation solutions.

These include customised software development and the integration of hardware and software systems for the bus and rail segments.

Go Hub's core profit for FY23 rose 26.1 per cent year-on-year to RM8.1 million, driven by higher revenue.

Its revenue increased 65.5 per cent year-on-year to RM43.9 million, primarily due to higher income from centralised ticketing and automated fare collection systems, as well as an increased utilisation rate of the terminal operating system at several bus terminals under its coverage. - Bernama