PETALING JAYA: The outlook for NexG Bhd, formerly known as Datasonic Group Bhd
, remains strong following its RM9.97mil contract win from the Civil Aviation Authority of Malaysia (CAAM).
The contract, awarded to NexG’s wholly-owned subsidiary NexG Technologies Sdn Bhd, for the development of an unmanned aircraft system traffic management system, reinforced the group’s strategic push into technology and security solutions, setting the stage for future growth opportunities.
BIMB Research viewed the contract win positively, noting that it aligns with NexG’s strategic goal of diversifying into new business segments.
However, BIMB Research noted that the contract’s relatively modest value might not significantly impact NexG’s near-term earnings.
“Though we remain upbeat on NexG’s growth prospects, we do not foresee a material impact on earnings in the near term, given the relatively modest contract value,” the research house stated in its report yesterday.
BIMB Research maintained its “buy” recommendation on NexG with an unchanged target price of 45 sen, based on a price-to-earnings ratio of 18 times, applied to the forecast earnings per share of 2.5 sen for the financial year ending March 31, 2026.
It noted that NexG warranted a premium valuation due to its market leadership in secure identification solutions, a solid order book of RM400mil, promising prospects for overseas expansion and ongoing diversification initiatives.
The project, set to be executed in phases (U1 and U2) over 24 months from March 5, 2025 to March 4, 2027, aims to improve air traffic management for drones and unmanned aerial vehicles in both controlled and uncontrolled airspace.
Under the terms of the letter of award, NexGT is required to provide a performance bond of RM498,000 to CAAM, valid for 12 months beyond the contract completion or final obligation date, whichever is later.
