KUALA LUMPUR: LGMS Bhd
could benefit from the Cyber Security Act 2024, which came into force in August last year, and the rollout of the group’s plug-and-play cyber security solution, say analysts.
They believe the local cybersecurity industry offers strong long-term growth potential from a low base.
According to Kenanga Research, LGMS’ shift to an in-house, subscription-based sales model for its security solution is aimed at driving recurring revenue, but this may exert pressure on margins in the near term.
LGMS is currently seen to be prioritising sales traction and brand awareness over profitability.
“While we remain positive on the sector’s long-term outlook, we believe LGMS’s near-term prospects hinge on greater product awareness and stronger enforcement of cybersecurity regulations.
“Given the early stage of market development and the gradual roll-out of regulatory compliance, we maintain a cautious stance on LGMS’ short-term growth trajectory,” it said.
Kenanga Research maintained its “market perform” rating and target price on the counter at RM1 per share, based on a rolled-forward valuation base of the financial year 2026 forecast price to earnings ratio of 30 times.
It said that Malaysia’s cybersecurity industry offers strong long-term growth potential.
