Datasonic could see a near-term earnings pressure as its quarter-in-review supported views that the group’s earnings growth could plateau after a record year in FY23.
MIDF says the group’s effort to diversify its earnings base outside the country has yet yielded meaningful results.
Lower quantity delivered in 2QFY24. To recap, 2QFY24 earnings declined by -27.2%yoy. MIDF said it gathered that quantity of Mykad consumables, passport polycarbonate data pages, passport chips and passport booklets was lower comparatively.
Nonetheless, the supply of MyKad, passport chips and passport booklets came in higher as at 1HFY24. This led to a slight uptick in 1FHY24 earnings to RM37.2m (+0.7%yoy)
The management shared that they had stopped delivery of MyKad since October 2024. It is currently awaiting a new contract in December 2024 to resume the delivery of MyKad. This could potentially have an impact on its 3QFY24 earnings performance. Nonetheless, MIDF said it understands that the renewal of the delivery of MyKad comes with higher ASP which could potentially lift 4QFY24 earnings
As of Sept 2023, management guided that there are estimated 4m unit of passports that are due for renewal. This would keep demand for passport to remain strong. In addition, the i-kad project has commence in August 2023. Demand to remain on upward trajectory at more than 100k i-Kad per month in conjunction with the upcoming announcement of i-Kad as the mandatory document for all foreign workers with approved Visa.
To recall, the group won a contract worth RM140m to supply i-Kad for a period of three years until Oct 2025. Awaiting further progress from oversea project. The management updated that it is finalizing the contract terms with the Republic of Guinea for a range of services including secure document printing, digitization, and biometric authentication for land management. Meanwhile, Datasonic is still working on replicating its core business outside Malaysia.
