The recent investors briefing by Ramssol provided greater clarity on the group’s roadmap. Ramssol introduced several key pillars that will drive its growth ahead, all of which are a good mix of stable and low-risk, high-risk strategies with strong growth potential, as well as complementary that could lead to cost savings.
PeopleTech – the bread and butter HCM business. With an orderbook size of MYR55-60 million, or revenue cover of up to two years, this segment has strong visibility. Ramssol has identified several key MNC and GLC players, including companies based in other SEA countries for the implementation of Oracle, DarwinBox and Laiye’s HCM and back office solutions. Elsewhere, it is also pushing for more B2B2C partnerships for its proprietary employee engagement app Feet’s, with a target to reach 1 million registered users by end-23, from 120k in 2022.
EduTech – growing anti-corruption awareness. Ramssol has the exclusivity to run enforcement and compliance-related trainings for government agencies on behalf of MACA under the latter’s EXCEL program. While yet to be made mandatory, the group is hopeful that these trainings would gain traction across GLCs, MNCs, PLCs and even SMEs, given the rising awareness of anti-corruption compliance matters. The total addressable market is attractive given the large amount of entities it can tap into for the training.
AutoTech – high-risk, high-reward segment. RiderGate (RG) is Ramssol’s attempt to penetrate into the automotive industry through the development of a digital marketplace for the motorcycle market. It had recently raised c.MYR7.2 million through a private placement exercise to fund the development and other related expenses of the platform. The first phase of RG could complete by 2Q23, in which the group could immediately monetise through the transaction of new and used motorcycles done on the platform. The sales proceeds can then be recycled for further development phases and strengthen its position as the first mover in the market.
Overall, Maybank Research makes no changes to its estimates for now; it has projected the revenue mix from both EduTech and AutoTech to grow from 0% in financial year 2022 (FY22E) to 25% to 34% in financial year 2023 – 2024 (FY23/24E).
Hence, Maybank Research has reiterated BUY rating with an unchanged target price (TP) of MYR0.50, pegged to 12.7x FY23E PER.
Upside risks identied are increase in market share in the HCM industry through the penetration into new markets; Normalisation in the cost structure following the initial establishment of operations in the new markets; Sustained demand for digital communication tools due to the shift towards virtual collaboration between employees and external parties.
Downside risks identified are, rising competition from other vendor partners that may result in loss of market share; reduction in the adoption of virtual office settings and digital communication tools; ongoing cost escalations as a result of its expansionary exercises that may have a negative impact on its operating margins.
