by ASILA JALIL / pic by TMR FILE
RADIANT Globaltech Bhd (RGTech) expects robust business growth momentum ahead supported by accelerated demand for digitalisation of operations in both retail and industrial sectors.
CGS-CIMB Securities Sdn Bhd (CGS-CIMB Research) stated demand for digitalisation of operations in both sectors will be enhanced due to higher adoption of digital solutions to automate business processes as business continuity rises in prominence following the Covid-19 pandemic.
“RGTech said its future growth will be fuelled by new customer acquisitions (local and overseas), growth plans of clients (new stores and factories), and further digitalisation efforts of existing customers,” the broker stated in a report on Monday.
RGTech is an ACE Market-listed company which provides integrated technology solutions for automation and digitalising purposes targeting the retail, food & beverages (F&B) and industrial sectors.
It offers end-to-end solutions comprising hardware, maintenance and technical support services. CGS-CIMB Research noted RGTech’s client base includes wide-network retail chains such as Parkson Holdings Bhd, Guardian, 99 Speedmart Sdn Bhd, 7-Eleven Inc and Aeon (M) Sdn Bhd.
RGTech has since October 2020 completed three acquisitions worth a total RM14.6 million, including an 80% stake in GrandFlo Spritvest (electronic data capture and solutions provider in the industrial sector) for RM11.6 million in October 2021.
In January 2020 it signed a joint venture (JV) with Simat Technologies (SIMAT TB, non-rated) to enter Thailand’s F&B market.
RGTech stated these acquisitions and JV are expected to create synergies with its existing businesses, widen its product offerings and diversify its customer base.
As at end-2021, RGTech had a net cash position of RM36.1 million (0.07 sen per share). In addition, the company had a net tangible asset value of 14 sen per share and net asset of 14 sen per share.
CGS-CIMB Research stated RGTech does not have any directly comparable peers listed locally due to its exposure to retail and industrial automation technology sectors.
“On the local scene, we see e-payment and software providers as the nearest comparable peers; they currently trade at 17.1 times-63.9 times cyclical year (CY)23F price-to-earning (P/E), based on Bloomberg consensus estimates.
“On a global scale, payment providers are trading at 10.5 times-66.6 times CY23F P/E. RGTech is currently trading at a CY21 P/E of 33.5 times, a 44.7% discount to its local e-payment and software providers’ CY21 P/E of 60.6 times. This is also at a 42.1% discount to global e-payment and software providers’ CY21 P/E of 57.9 times,” the broker added.
The firm noted RGTech is currently not covered by any research house based on data from Bloomberg.