PETALING JAYA: Agmo Holdings Bhd’s core revenue and profit is expected to grow at a three-year compound annual growth rate (CAGR) of 15% and 8.9% to reach RM25.1 million and 8.9 million, respectively. RM6 million, in its financial year ending in 2025 (FY25).
According to TA Research, ACE Market-bound Group expects revenue growth to be driven by its mobile and web application development segment, as a growing number of companies step up their initiatives digitization to remain competitive in an increasingly digitized world.
He said near-term visibility is also supported by Agmo’s backlog of RM11 million as of July 4, 2022, with RM9.4 million expected to be recognized in FY23.
“Ultimately, we expect core earnings to grow at a slower rate due to a higher tax rate as its second term of Pioneer Status looms on December 10, 2022. .
“We also expect Agmo’s core net profit margin to moderate to 39.6%, 33.5% and 34.4% in FY23, FY24 and FY25, respectively.
“We expect its pre-tax profit to grow at a three-year CAGR of 17.8% to RM11.4 million in FY25,” TA Research said in a report.
Agmo’s initial public offering (IPO) is priced at 26 sen, but TA Research has a target price of 41 sen, based on a valuation of 18 times the price-earnings (PE) multiple for the calendar year 2023.
The research house derived this value from Agmo’s IPO price at a PE of 12.6x to its FY22 basic earnings per share.
“This took into account Agmo’s established track record, experienced management team and technical expertise, as well as its strong margins and earnings growth outlook,” he said.
From its fiscal year 2019 to its fiscal year 22, Agmo’s revenue and net profit grew at a three-year CAGR of 44.9% and 40.5% to reach RM16.5 million, respectively. and RM6.7 million.
“The robust growth was largely driven by the development of the mobile and web applications segment, as well as the provision of subscription, hosting, technical support and maintenance services,” he said.
Additionally, Agmo’s revenue growth in FY21 and FY22 was fueled by a new revenue stream from providing the digital platform-based services segment.
“Revenues from this segment represented 8% and 7% of Agmo’s revenues for FY21 and FY22, respectively.
“It was supported by the launch of the group’s internal remote participation and voting platform to facilitate the organization of virtual meetings, which involve online voting such as general meetings and general meetings.”