PETALING JAYA: BIMB Research has initiated coverage on Vstecs Bhd
with a “buy” call and target price (TP) of RM2.14, citing the group’s position at the centre of Malaysia’s information and communications technology (ICT) ecosystem and its exposure to rising data centre (DC) investments and digitalisation trends.
The research house said VSTECS, which distributes hardware, software, cloud and enterprise solutions, is well placed to benefit from growing demand for ICT infrastructure as more DCs come onstream and enterprises accelerate artificial intelligence (AI) adoption.
“Rising DC investments and public sector digitalisation policies should spur ICT infrastructure spending and device replacement demand, providing a meaningful growth catalyst for the group.”
BIMB Research expects the group’s earnings quality to continue improving as its revenue mix shifts towards higher-margin cloud and digital solutions.
“As AI adoption accelerates, demand for cloud infrastructure, managed services, cybersecurity, and data management is creating a structural tailwind for Vstecs’ higher-value offerings, which carry superior margins compared with traditional ICT hardware distribution,” it said.
The research house noted the group’s profit-before-tax margin expanded to 3.6% in the financial year ended Dec 31, 2025 (FY25) from 2.8% in FY21, while return on equity improved to 18.7% from 15%.
It also expects a new wave of ICT spending as a large portion of Malaysia’s DC projects become operational by end-2026.
VSTECS is well positioned to benefit via its enterprise systems and ICT services segments, while also capturing demand for cloud and managed services as AI adoption gains traction, the research house said.
