PETALING JAYA: Ramssol Group Bhd (RGB) is expected to experience positive growth momentum, given its proven track record and a new business segment – Edutech, according to CGS-CIMB Research.
He said the HR solutions provider’s proven track record is backed by its human resource technology (HR technology) know-how and research and development (R&D) capabilities.
“RGB’s background in HR technologies can be seen in its founders having over 15 years of average industry experience.
The group is also a certified reseller of leading third-party human capital management (HCM) software.
“In addition, RGB also has R&D capabilities to develop HCM technology in-house. Its client base includes regional banks and multinationals,” the research house said.
CGS-CIMB also noted that there is a structural shift towards HCM digitization.
This will benefit RGB given its strong market presence in five countries in the ASEAN region.
“We believe that revenue growth in HR technology will be driven by the continued digitization efforts of more companies and a broader product offering to cater to a broader customer base and to their different needs.
“These include tie-ups with Darwinbox, which is involved in the digitization of small and medium-sized businesses, and Laiye, which deals with intelligent automation technology,” the research house said.
CGS-CIMB Research said RGB is likely to benefit from upgrades and continued digitization of customer HCM systems and system maintenance work. This allows the group to see recurring business after a project.
Another growth engine of the group is Edutech.
Under this segment, the group is a training provider in areas such as information technology (IT) and anti-corruption.
The segment will likely contribute to a compound annual growth rate (CAGR) of 274.5% for RGB’s revenue from fiscal year 2021 (FY21) to FY24.
“As a registered training provider with the Human Resource Development Corp of Malaysia, it aims to tap into the organization’s allocation, a fund estimated at RM2bil in 2021, for its members to upskill their workers,” said the research house.
Considering growing demand for HCM solutions and technology applications, expansion plans into new markets as well as product offerings, RGB is expected to have a three-year earnings per share CAGR of 10.2%.
CGS-CIMB Research has an “add” call with a target price of 55 sen to RGB with a price/earnings ratio of 12 times based on forecasts in 2023. This is a 30% discount to its Malaysian peers given the drop in RGB. market capitalization, heavy reliance on third-party IT solutions and a relatively small product portfolio.