OCBC initiates coverage on Info-Tech Systems with ‘buy’ call amid favourable growth trends

[SINGAPORE] OCBC Investment Research has initiated coverage on Info-Tech Systems with a “buy” call, on account of favourable secular growth trends that could benefit the software services provider.

This follows the company’s Jul 4 trading debut on the Singapore Exchange (SGX) mainboard, as the first pure-play software-as-a-service (SaaS) provider for human resource management systems (HRMS) and accounting software to list on the bourse.

OCBC Investment Research on Friday (Aug 29) noted that the scalability of Info-Tech Systems’ software solutions and its accessible price points are “attractive to cost-sensitive SMEs (small and medium-sized enterprises) that are just embarking on their digitalisation journeys and are first-time users of HRMS”.

Info-Tech Systems also offers comprehensive after-sales service and customer support, analyst Ada Lim highlighted.

“We think these customer-centric features allow it to differentiate from its competitors, positioning it well to benefit from a global movement towards SaaS offerings amidst policy support to transition towards digital economies,” Lim said.

OCBC Investment Research assigned the company a fair value estimate of S$1.00, 13.6 per cent or S$0.12 above its closing price of S$0.88 on Friday.

“We see deeper penetration of existing markets and the launch of new products as key near-term growth catalysts,” Lim said.

Favourable secular growth trends

OCBC Investment Research said Info-Tech Systems is well positioned to benefit from secular growth trends, including the global movement towards SaaS offerings.

With the SME market for cloud-based SaaS HRMS and accounting software is expected to expand, Info-Tech Systems has a “significant runway for growth”, the research house noted.

Citing Converging Knowledge data, OCBC Investment Research noted that the market for such services in Singapore, Malaysia, Hong Kong and India stood at about US$3.3 billion in 2024 – 100 times Info-Tech Systems’ FY2024 revenue.

“These geographies are also expected to grow at compound annual growth rates of 11.9 per cent, 9.2 per cent, 10 per cent and 7.2 per cent, respectively, from 2025 to 2029,” OCBC Investment Research said.

The research house added that this comes amid growing digital transformation efforts across various industries and increasing policy support for digitalisation, as well as the rising importance of HR and finance departments.

Positive guidance for H2 2025

OCBC Investment Research also noted that Info-Tech Systems’ management has guided for stronger growth in H2 of 2025. This is driven by intensified marketing efforts, as the company continues focusing marketing spend on initiatives with higher returns on investment, it said.

The company’s revenue for H1 2025 grew 4.7 per cent year on year to S$22.4 million, led by faster growth from its overseas markets, OCBC Investment Research pointed out.

It added that Info-Tech Systems improved its gross customer retention rate by another three percentage points to 94 per cent over the six-month period.

Info-Tech System’s higher-than-expected growth in customer numbers, pricing power and entry into new geographic markets could be potential catalysts, the research house said.