Cloudpoint moving higher, riding on data centre boom

Positive momentum is expected for Cloudpoint Technology Bhd after breaking out of of it fell to a month low of 70 on Sept 11. The company has done fairly well year-to-date, surging some 45.4% to close at 80 sen on Oct 4.

The data-center networking, cyber-security, servers, storage and data management, and hybrid IT solutions provider has been in the limelight, riding on the data center hype. The company is currently trading at a PE ratio of 24.6x and P/NAV ratio of 5.9x, which are lower than most peers.

Financially, Cloudpoint has fared relatively well. Its net profit for the first quarter ended March 31, 2024 (1QFY2024) increased 23% year-on-year to RM3.7 million on the back of higher revenue of RM34.66 million versus RM19.4 million a year ago. Earnings per share rose to 0.70 sen from 0.67 sen.

Cloudpoint has recently onboarded one of the top banks in the country, extending its reach to five of the top six banks nationwide. Its digital applications and cloud services segment is also beginning to make more significant contributions, with several new projects scheduled for implementation this year.

Its project-based revenue will maintain its strong trajectory throughout the year, driven by several potential data centre technology refresh contracts on the horizon.

The company is also positioned for growth boosted by rising demand for cybersecurity solutions and data centre market boom. In order to position Cloudpoint as a key player in this rapidly expanding landscape, Cloudpoint in investing to become a comprehensive and end-to-end solutions provider for data centre and cloud services.

Cloudpoint aims to offer our customers a seamless experience from sourcing and building, to managing their infrastructure through a single provider.

In February this year, Cloudpoint announced that it would be acquiring 75% equity interest each in Unique Central Sdn Bhd (UCSB) and Uniqcen Sales & Services Sdn Bhd (USSSB) for RM26.78 million cash.

UCSB is involved in the supply, delivery and installation of DCs, data cabling, fibre optic works, as well as mechanical and electrical services, while USSSB is an electrical contractor.

The IT solutions provider said the deal would allow the group to offer end-to-end DC, hybrid cloud and multi-cloud solutions, as well as green and sustainable DC solutions to its customers. With its many prong approaches to boost its growth, investors may want to ride on this boom.