PETALING JAYA: Datasonic Group Bhd
has been on a positive run of winning contracts, including its recent letter of extension (LoE) from the Home Affairs Ministry worth RM104.78mil.
The LoE was won via its wholly-owned subsidiary, Datasonic Technologies Sdn Bhd (DTSB), and is the fifth contract extension so far from the Home Affairs Ministry.
The LoE will entail the supply of passport chips to the Malaysian Immigration Department as well as other maintenance services which went into effect on Dec 1, 2024 and will run until Nov 30, 2025.
Under the contract, Datasonic will provide services for public key infrastructure, system chip, and e-gate and pre-read kiosk.
As part of the agreement, DTSB must furnish a performance bond totalling RM3.66mil to the Home Affairs Ministry.
BIMB Research is positive on the development for Datasonic as the contract aligns with its expectations.
“Thus, our earnings forecast remains unchanged.
“We reiterate our ‘buy’ recommendation on the group with a target price of 63 sen a share, based on a 17 times price earnings ratio that’s applied to financial year 2025 earning-per-share of 3.7 sen,” it wrote in recent report.
The research house likes Datasonic for its strong market leadership as the local leading provider for secure identification solutions as well as its solid order book that is recorded around RM350mil.
“The group also has promising overseas expansion prospects and ongoing diversification initiatives across its business segments,” BIMB Research said.
This contract extension follows two LoE’s from the Home Affairs Ministry totalling RM150.45mil that was announced earlier this month.
According to a filing with Bursa Malaysia, the first LoE is for the supply of Malaysian passport documents to the Immigration Department for a period of 12 months commencing from Dec 1, 2024 to Nov 30, 2025 for an additional third ceiling contract value of RM57.15mil.
It noted the second LoE is for the supply of polycarbonate biodata pages to the Immigration Department for a period of 12 months commencing from Dec 1, 2024 to Nov 30, 2025 for an additional third ceiling contract value of RM93.3mil.
“The contracts are expected to contribute positively towards the future earnings and net assets per share of Datasonic group for the financial year ending March 31, 2025 and the financial year thereafter for the duration of the contract and will not have any effect on the share capital and substantial shareholders’ shareholdings of Datasonic group.”
Datasonic was last traded at 39.5 sen a share.
