TA Securities Research has initiated coverage on ICT Zone Asia Bhd – Malaysia’s pioneer technology financing (TechFin) solutions provider – with a “buy” rating and a target price of 27 sen.
This valuation represents a significant upside potential of approximately 42% from the last traded price of 19 sen based on the research house’s report dated Feb 5.
In its initiation report, analyst Joram Isac S Ooi placed emphasis on the capabilities of ICT Zone’s TechFin business model and its abilities to generate recurring, high-visibility earnings, supported by long-term contracts and a multi-year order book that stretches up to five years.
By enabling organisations to shift from upfront ownership (capex) to subscription-based leasing (opex), the group has successfully built a high-quality earnings base.
The research house estimates that more than 50% of ICT Zone’s revenue is recurring, supported by long-term rental contracts with an average tenure of three years.
Furthermore, the report noted that the group’s client base is well-diversified with the largest single contract contributing only around 10% of the total order book, hence significantly mitigating concentration risk.
Order book and earnings growth underpinning the positive outlook is ICT Zone’s robust estimated order book of approximately RM312.3 mil as of January 2026. This substantial backlog provides exceptional revenue visibility.
High earnings visibility
Based on this order book and assumptions on order replenishment, TA Securities Research projects a strong earnings growth trajectory for the group:
- FY 1/2026F: Net profit of RM13.8 mil (+56.8% year-on-year [yoy])
- FY 1/2027F: Net profit of RM20.0 mil (+44.9% yoy)
- FY 1/2028F: Net profit of RM23.6 mil (+18.0% yoy)
The report went on to identify ICT Zone as a key beneficiary of structural shifts in the technology landscape.
In this regard, TA Securities Research highlighted that the group is well-positioned to capitalise on the on-going digitalisation initiatives, particularly within the public sector.
Additionally, mandatory non-discretionary spending driven by the end-of-support for Windows 10 and the accelerating adoption of AI (artificial intelligence)-enabled computing is expected to drive a strong wave of device refresh cycles, thus further boosting demand for flexible, lease-based ICT solutions.
TA Securities Research arrived at its target price of 27 sen by applying a price-to-earnings (P/E) multiple of 11x to the group’s CY2026 earnings per share (EPS) forecast.
This valuation represents a discount to selected peers which the research house attributes to ICT Zone’s smaller market capitalisation and the higher gearing inherent in its asset-backed leasing model.
However, TA Securities Research viewed the current valuation as compelling given the group’s high earnings visibility, disciplined capital deployment and growing contribution from recurring income.
Investors also stand to benefit from the group’s dividend policy which targets a payout of up to 20% of annual audited net profit.
At the close of today’s (Feb 5) market trading, ICT Zone was unchanged at 19 sen with 5.39 million shares traded, thus valuing the company at RM151 mil. – Feb 5, 2026
