PETALING JAYA: TA Research has upgraded its earnings forecasts for ICT Zone Asia Bhd
by double digits, after the company beat profit expectations for the financial year ended Jan 31, 2026 (FY26).
In a note last Friday, TA Research raised its FY27 earnings estimate by 14.6% and its FY28 by 13.6%, incorporating stronger trading revenue assumptions.
“Following the upward revision to our earnings forecasts, we raise our target price (TP) to 31 sen from 27 sen, based on an unchanged price-to-earnings ratio of 11 times FY26 core earnings per share (EPS).
“The higher TP also reflects an improved FY26 EPS, underpinned by the stronger-than-expected FY26 results.
“In addition, we view the recent share price pullback as an attractive entry opportunity, implying an upside of 82.4% from current levels,” according to the research house, which maintained its “buy” call.
In FY26, ICT Zone’s core net profit of RM15.2mil beat TA Research’s expectation, accounting for 114.6% of its full-year forecast.
The variance was due to higher-than-expected revenue from the trading segment.
Full-year net profit surged by 83% year-on-year to RM16.11mil, with revenue up by 46% to a record RM186.99mil.
In a statement, managing director and chief executive officer Tommy Lim said ICT Zone has invested over RM100mil in capital expenditure (capex) to acquire new information and communications technology assets.
“In our techfin model, this capex is our revenue engine; these assets are immediately deployed into long-term lease contracts that generate sticky, recurring cash flows.
“By converting what would be a heavy upfront capital commitment into a managed, subscription-based solution, we help our clients maintain access to modern, artificial intelligence-ready computing infrastructure without bearing the full weight of rising procurement costs,” said Lim.
TA Research continues to favour ICT Zone for its recurring contract-backed earnings, unique multi-lifecycle model that enhances margins and capital efficiency, as well as structural tailwinds from the government’s ongoing digitalisation agenda.
Quoting Gartner, the research house said the demand for personal computers (PC) is rebounding strongly, after global shipments exceeded 270 million units in 2025.
Hardware costs are also rising sharply.
Gartner projects combined dynamic random-access memory and solid state drive costs could rise 130% by end-2026, pushing PC prices up 17% in 2026.
“As a result, device-as-a-service is gaining ground.
“As upfront hardware costs rise, organisations are shifting toward subscription-based procurement models.
“Rather than absorbing large capex upfront, businesses can spread costs over time while benefitting from managed lifecycle support, making it easier to stay current with hardware without being exposed to volatile component pricing.
“Looking ahead, ICT Zone sets its sights on RM250mil in new order book replenishment for FY27, as the group looks to sustain its earnings growth momentum heading into the new financial year.”
As at end-January 2026, ICT Zone’s unbilled order book stood at RM293mil, with about RM109.8mil in techfin order book set to be recognised in FY27.
Combined with about RM41.6mil in recently secured hardware trading contracts, ICT Zone said it enters FY27 with roughly RM151.6mil in locked-in revenue.
