Ramssol set for earnings growth on Asean human capital management demand
KUALA LUMPUR: Ramssol Group Bhd's earnings are expected to grow in the next financial year, supported by rising demand for human capital management (HCM) solutions across Asean.
Hong Leong Investment Bank Bhd (HLIB) said Ramsol is also poised to benefit from strong earnings prospects in its Artificial Intelligence (AI) Tech and Auto Tech segments.
The firm noted that demand for HCM solutions in the region is accelerating, fuelled by ongoing digitalisation and supportive government policies.
"We project Ramssol's earnings to grow at a strong three year compound annual growth rate of 28.6 per cent, underpinned by stronger anticipated sales from its People Tech and AI Tech segments and maiden contributions from Auto Tech," it said in a note.
Meanwhile, HLIB said it is particularly positive on Ramssol's two key new segments - Pay Day Now and Rider Gate - that have the potential to drive the group's earnings growth.
In September 2024, Ramssol entered into a strategic collaboration with AmBank Group to offer Earned Wage Access to employees of its corporate clients.
Leveraging Ramssol's existing clientele and AmBank's extensive corporate network, we see strong growth opportunities in Pay Day Now.
Notably, the firm expects a high onboarding rate from customers, as it serves as a tool to attract and retain talent, with no upfront costs involved.
"We estimate the monthly revenue potential from Pay Day Now to range between RM100,000 and RM1.2 million, depending on the frequency of withdrawals.
We believe the price-to-earnings (P/E) valuation methodology is most appropriate for Ramssol, given its consistent profitability, forward earnings visibility, and growth trajectory.
"We ascribe a P/E multiple of 22 times based on financial year 2026 (FY26) earning per share of 5.5sen, and derive a target price of RM1.21," it added.
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