PETALING JAYA: Ramssol Group Bhd
is poised to expand its presence in South-East Asia via its wholly owned subsidiary’s proposed 51% acquisition of Thailand-based tech company GeekStart Co Ltd for RM6.9mil.
“We are sanguine over the acquisition that is expected to be earnings accretive over the foreseeable future,” Apex Securities Research said in a recent report.
The move will allow software company Ramssol to spread its presence in the regional market as well as offer GeekStart’s already deployed artificial intelligence (AI) solutions to existing and prospective clientele, the research house added.
“The price tag translates to a historical price-earnings (PE) multiple of 10 times, which we deem is a decent bargain that comes with a profit guarantee of RM2.4mil and RM3.6mil for 2024 and 2025, respectively,” Apex Securities Research said.
The proposed acquisition is expected to be completed in July this year.
According to the research house, GeekStart has recorded consistently improving fundamentals over the past three years, with net profit rising from RM400,000 in 2021 to RM1.4mil in 2023. It also has zero debt and net assets RM3.4mil as of end-2023.
Apex Securities Research said Ramssol will continue to focus on its key business pillars focused on the education, marketing and automotive sector.
“We expect the automotive sector to make a larger contribution in the second half of 2024 from a higher number of transactions, while education and marketing will focus on consistent launching of new initiatives in line with evolving market demand,” the research house added.
The research house has raised Ramssol’s fully diluted earnings forecasts to RM17mil and RM19.1mil for 2024 and 2025, respectively, after incorporating profit-guarantee contributions from GeekStart.
Apex Securities Research has a “buy” recommendation on the stock with a higher target price of 76 sen, pegged to 18 times PE multiple to fully diluted 2025 earnings per share of 3.9 sen.
