CIMB Investment Bank Bhd (CIMB Securities) has initiated coverage on Cloudpoint Technology Bhd with a BUY rating and a target price (TP) of RM1.20, implying a 67.8% upside from its current share price of RM0.715. The research house based its valuation on 18 times CY2027F price-to-earnings (P/E), reflecting a 10% premium to the sector average given Cloudpoint’s entrenched relationships with Tier 1 financial institutions and its position as a one-stop IT solutions provider.
CIMB Securities said Cloudpoint stands out as a compelling proxy to Malaysia’s accelerating enterprise digitalisation drive. Operating across four key segments —networking and data centres, cybersecurity, professional IT services, and cloud solutions —the company’s end-to-end capabilities are enhanced by strategic partnerships with global technology leaders such as Cisco, AWS, Microsoft Azure, and ServiceNow.
The financial services industry (FSI) remains Cloudpoint’s earnings anchor, contributing more than 90% of FY2024 revenue through long-term relationships with major banks and insurers. CIMB expects IT spending in the FSI sector to remain resilient, driven by ongoing digitalisation and emerging technologies including generative AI, regtech and advanced CRM systems.
The house forecasted a three-year core net profit (CNP) compound annual growth rate (CAGR) of 19.5% from FY2024 to FY2027, supported by a robust RM110 million order book, increased contributions from its 75% stake in UC Group and rising demand for data centre cabling jobs. The analysts added that Cloudpoint’s professional IT services segment, which accounted for 42.6% of gross profit in the first half of FY2025, would continue to drive recurring income alongside one-off project revenues.
Financially, Cloudpoint remains in a solid position with a net cash balance of RM26.8 million. For FY2025, the company is projected to post revenue of RM197 million and a core net profit of RM24.2 million, growing to RM298 million and RM35.6 million respectively by FY2027. CIMB said valuation re-rating potential could emerge as the company captures more opportunities in Malaysia’s digital transformation landscape.
CIMB Securities added that Cloudpoint’s extended service reach, strong execution track record and exposure to key technology trends position it for sustained growth. “This strategic collaboration does more than unlock new business opportunities; it reinforces the B2B2C model where wholesalers, retailers and consumers interact in a progressive environment that can spur local economic growth,” the analysts noted.
Cloudpoint’s stock price is at RM0.74 (Up by 3.5%) as of 10.43 am.
