Breaking its own records; maintain BUY

RAMSSOL delivered its strongest quarterly performance on record in 3Q24 as 9M24 core net profit exceeded FY23’s full-year core earnings by 100%. Pending briefing updates later this morning, we maintain our earnings forecasts for FY24-26E. Our TP of MYR1.00 (pegged to 17x FY25E PER, at about the LT mean) and BUY rating are also maintained. We continue to like RAMSSOL for its leading expertise in distributing world-class enterprise HCM systems from the likes of Oracle, Darwinbox and Disprz.

Results Within Expectations

RAMSSOL registered 3Q24 core net profit of MYR4.4m (+202% YoY, flat QoQ). Despite coming in at 81% of both ours/street’s FY24E forecasts, we deem the cumulative 9M24 core net profit of MYR12.9m (+129% YoY) within expectations as 4Q24 will likely be impaired by seasonality factors. Underpinned by robust domestic momentum in the PeopleTech segment, this is RAMSSOL’s 3rd consecutive quarterly earnings outperformance.

Malaysia Sales Continue Outperformance

3Q24 group turnover grew 218% YoY/12% QoQ, on the back of strong HCM segmental delivery. Growth in Malaysia (+207% YoY) was driven primarily by new product offerings, higher engineer headcount, collaboration with partners for license distribution, and recurring software subscriptions. Despite a marked 348% QoQ increase in D&A expense, the high-margin HCM license distributorship helped boost group EBITDA margin by 0.4ppts QoQ.

Deploying AI-integrated Systems for Hospitals

On 7 Nov 2024, RAMSSOL announced that its 51% owned subsidiary, THbased software development company, GeekStart, had entered into an LOA with MDS Compant Ltd of Thailand for deployment of an AI-integrated healthcare system at the latter’s hospital. The LOA stipulates that MDS will pay GeekStart THB275m (c.MYR35m) over 10 installments throughout the duration of the project, which is set to be completed by Jun 2026. We expect the project to be value-accretive for RAMSSOL moving forward, with potential earnings contribution within our forecasts for FY25E/26E.

Source: Maybank Research - 12 Nov 2024