PETALING JAYA: Vstecs Bhd
is positioning itself at the heart of Malaysia’s accelerating artificial intelligence (AI) infrastructure boom, with analysts expecting a sharp earnings uplift as the country moves into a data centre (DC) fit-out cycle and enterprise technology spending ramps up.
UOB Kay Hian (UOBKH) Research is projecting that the information and communication technology (ICT) distributor will deliver a “sequentially stronger third quarter (3Q25),” driven by surging demand for AI-related DC equipment, rising public-sector digitalisation projects, and stronger consumer technology replacement cycles.
In a note to clients yesterday, the brokerage forecast 3Q25 net profit for VSTECS in the range of RM21.4mil to RM23.6mil, representing growth of between 6% and 17% quarter-on-quarter and between 10% and 21% year-on-year.
Momentum is set to accelerate further in the fourth quarter, with UOBKH Research saying: “We expect a sequentially stronger 3Q25, and we foresee an even stronger 4Q25 as the fourth quarter is the seasonally strongest quarter of the year with highest consumer and enterprise spending.”
Malaysia’s DC expansion is a defining catalyst for the company with multiple colocation facilities nearing delivery in Cyberjaya, Johor and Iskandar Puteri.
These sites are transitioning from construction to commissioning, which will trigger bulk procurement of servers, networking equipment and storage systems.
According to UOBKH Research, “Malaysia’s colocation DC momentum remains strong, with several facilities approaching completion in the second-half of 2025 or 2H25 and beyond.”
Beyond DCs, the group is pursuing a multi-layer AI commercialisation strategy spanning public cloud reselling, on-premise AI systems, and sovereign AI-as-a-service platforms tailored for local enterprises and telcos.
“VSTECS is exploring three complementary layers of AI infrastructure opportunities,” said UOBKH Research, with expectations that at least one stream will contribute meaningfully from 2026.
At the same time, it said consumer and enterprise device replacement remains another pillar.
This is as AI-enabled PCs and smartphones, including the latest iPhone and Pixel models, are expected to support distribution volumes.
The research outfit said IT service management company Gartner is forecasting that AI laptops will form 51% of global shipments in 2025, a trend that the group intends to monetise.
Cloud-service subscriptions and IT managed services are also forecast to scale rapidly, with VSTECS targeting an increase in recurring services revenue from roughly 20% to 50% within two years.
UOBKH Research is maintaining a “buy” call on the stock with a higher target price of RM5.10, up from RM4.38, citing strong earnings visibility and accelerating industry tailwinds.
“We believe the group has entered a strong growth phase of high earnings delivery by capturing the total addressable market of Malaysia’s colocation data centre segment,” it said.
