KUALA LUMPUR: Malacca Securities has assigned a fair value of 36 sen per share to Impact Capital Holdings Bhd, representing a potential upside of 63.6 per cent from its initial public offering (IPO) price of 22 sen.
In its IPO note, the research house said the valuation was based on a target price-to-earnings (PE) multiple of 15.2 times its estimated core earnings per share (EPS) of 2.39 sen for financial year 2028 (FY28).
It said Impact Capital was well-positioned to benefit from Sarawak’s ongoing digital infrastructure development, supported by its established presence in the state’s information and communications technology (ICT) sector.
“With a 21-year track record in networks where reliability matters more than price, we see Impact Capital as the partner of choice for the next phase of Sarawak’s digital infrastructure,” it said.
The Sarawak-based ICT systems integrator provides telecommunications networks, enterprise networks, data centres and security systems, primarily for state government bodies and utility providers.
Malacca Securities said ICT integration contributed 72.7 per cent of the group’s FY26 revenue, while Sarawak accounted for 75.1 per cent.
It projected the group’s net profit to grow at a compound annual growth rate of 17.3 per cent, reaching RM10.7 million in FY27, RM12.3 million in FY28 and RM15.1 million in FY29.
The projected growth is expected to be driven by annual order book replenishment of RM200 million to RM250 million, higher contributions from recurring maintenance and software income, and margin expansion as the group shifts towards services and in-house delivery.
The research house noted that Impact Capital had an outstanding order book of RM169.9 million, of which RM133.7 million was scheduled for recognition by June 2027, providing earnings visibility into FY27.
It added that Sarawak’s ongoing digital infrastructure development presented a multi-year growth opportunity for the group.
The state had 4,217 operational telecommunications towers as of Nov 2023, compared with an estimated 7,000 needed by 2030 to achieve full coverage of populated areas.
Meanwhile, 5G coverage stood at 63.8 per cent of populated areas in Sarawak, compared with 82.4 per cent nationally, while only 34 per cent of households had fixed broadband access, below the national average of 48 per cent.
Malacca Securities said the infrastructure gaps, coupled with continued government funding for digitalisation initiatives, would support demand for the group’s services.
Impact Capital’s IPO is scheduled to be listed on the ACE Market of Bursa Malaysia on Nov 24.