As the third-quarter earnings season draws to a close, numerous publicly listed companies have released their financial results. Today, we highlight one such company that has performed exceptionally well in the third quarter: Systech Berhad (SYSTECH, 0050). First, let’s take a brief look at the company’s background.
According to its 2024 annual report, SYSTECH was listed on the Malaysian Stock Exchange’s ACE Market on June 15, 2011. The company focuses on three core business areas: Corporate Solutions, Cybersecurity, and e-Logistics.
In Corporate Solutions, SYSTECH aims to drive digital transformation and business automation by providing Artificial Intelligence (AI), Enterprise Resource Planning (ERP), Internet of Things (IoT), and Human Capital Management (HCM) solutions. In Cybersecurity, the company offers a comprehensive range of services, including cybersecurity consulting, professional services, technical risk assessments, training, and related solutions. In the e-Logistics segment, SYSTECH primarily serves the Singapore market, offering mail services for annual reports and publications, while also providing digital reports in dynamic formats to enhance the delivery experience for clients.
It is reported that SYSTECH’s primary revenue source comes from its Cybersecurity business, contributing 53.00% of the total revenue for the 2024 fiscal year. This is followed by e-Logistics at 26.00%, and Corporate Solutions at 21.00%. Notably, while SYSTECH’s customer base spans Malaysia, other countries in Asia, and other continents, the majority of its revenue still comes from the Malaysian market.
Now, let’s examine SYSTECH’s recent financial performance.
Revenue Comparison (YoY +244.02%, QoQ +67.00%)
As of September 30, 2024, the company’s revenue reached approximately RM17.02 million, a significant increase of 244.02% compared to RM4.95 million in the same period last year, marking a historic high. This surge was primarily driven by growth in the Corporate Solutions and e-Logistics sectors.
Compared to the previous quarter’s revenue of about RM10.19 million, the company’s revenue for the current quarter rose by RM6.83 million, reflecting a 67.00% increase. This substantial growth was largely attributable to the strong performance of Corporate Solutions and strategic acquisitions of TalentCloud AI Sdn. Bhd. and Wilstech Sdn. Bhd., which have further strengthened the company’s competitiveness in the fields of AI solutions and digital enterprise services.
(Note: SYSTECH’s fiscal year ends on March 31 each year.)
Net Profit Comparison (YoY +329.22%, QoQ +174.68%)
Driven by the strong growth in Corporate Solutions revenue, SYSTECH successfully turned a profit this quarter, posting a net profit of approximately RM1.15 million, reflecting a year-on-year increase of 329.22%.
Moreover, compared to the net loss in the previous quarter, the company showed a notable recovery, with net profit increasing by RM2.70 million, or 174.68%. This quarter-on-quarter growth was mainly due to the completion of the acquisition of Wilstech Sdn. Bhd. and the absence of any professional fees incurred during this period.
Outlook
SYSTECH will continue to focus on achieving organic growth through its Corporate Solutions offerings, covering AI, ERP, IoT, HCM solutions, and Cybersecurity, all aimed at promoting digital transformation and automation. Additionally, the company will leverage its extensive customer network to actively explore new opportunities in AI and IoT solutions.
In June and September of this year, SYSTECH formed collaboration with EH Integrated Systems Sdn Bhd (EISSB) and Pinetop Technology Venture Sdn Bhd, respectively, to jointly develop and operate AI data centers in Malaysia. By combining EISSB’s expertise in high-performance computing infrastructure with Pinetop’s technical expertise in AI-driven operations, SYSTECH will not only enhance its service capabilities but also expand into new market sectors.
As a result, the management is confident in the company’s future growth prospects. So, dear readers, how do you view the outlook for Systech Berhad?