PETALING JAYA: Vstecs Bhd
is poised to sustain its earnings momentum in the second half of financial year 2026 (2H26), supported by seasonally stronger fourth-quarter (4Q) demand, new smartphone launches and accelerated enterprise IT procurement.
In a note to clients, BIMB Research is forecasting profit after tax and minority interests or Patami of RM71.9mil, up 61.9% from the first half. This would lift its full-year (FY26) earnings by 8.2% year-on-year to RM116.3mil.
VSTECS, which provides eCommerce systems and solutions, is scheduled to release its 3Q26 results on Nov 18, 2026. Its balance sheet is expected to strengthen following the disposal of ISATEC Sdn Bhd, which is projected to generate about RM46mil in net proceeds.
The divestment is expected to increase the group’s cash balance by 71.3%, from RM64.5mil in 2Q26 to RM110.5mil, giving it greater financial flexibility to fund strategic acquisitions and expand its product and service offerings.
The research firm said demand for consumer ICT products remains robust, supported by sustained replacement demand and upcoming product launches.
“While vendor pricing is likely to remain elevated through FY28 amid ongoing component shortages, management indicated that volume demand has remained resilient despite price increases.
“We, therefore, expect the ICT distribution segment to maintain healthy growth, supported by strong consumer demand and higher average selling price.”
Its enterprise segment will remain the group’s primary contributor, underpinned by healthy demand for enterprise infrastructure solutions amid expanding AI data centre deployments.
According to BIMB Research, growth should also benefit from the government’s ongoing digitalisation agenda, which continues to drive ICT spending across government agencies, schools and higher education institutions.
Similarly, the ICT services segment should continue to deliver steady earnings growth, supported by expanding recurring subscription and managed services revenue from enterprise and hyperscale customers. It said as organisations increasingly migrate workloads to cloud-based platforms, the company is benefiting from longer customer engagement cycles, enhancing earnings visibility and improving revenue quality over time.
“Cloud-related revenue currently accounts for 30% of ICT Services revenue, with management targeting this to increase to 50% over the next two years.”
It maintained its “buy” call on the stock with an unchanged target price of RM2.07, based on 17.2 times its FY27 forecast earnings per share of 12 sen.
The valuation multiple is 0.5 standard deviations above the stock’s three-year historical average.
