Paving the way into gigantic AI and DC theme.

Optimistic business outlook

The company has secured RM85.52 million purchase order for AI super servers from a leading e- commerce platform in S.E Asia and Taiwan. This order is to supply a data centre located in Johore Bahru and are expected for delivery in August 2024. To highlight to you, Johore Bahru is the fastest growing market for data centre in S.E Asia.

The growing demand of AI super server, could uplift SNS financial performance with gross profit margin of 15% which is higher than the existing core business (which contribute gross profit margin 5%). So, combining both AI frenzy and its existing commercial channel remains major contributor for the revenue, it is anticipated SNS earnings to grow for FY2024-FY2027 at CAGR 39%

SNS also maintain a solid balance sheet, with a gearing ratio of 0.13 times as of 4Q FY2024. Together with 3% FY2025F dividend yield, SNS is an attractive proposition at 11 times FY2025F per earning ratio. As of today, the increased 369% market capitalization derived from an increase of PE from 8.1 to 52.47.

The future is bright and diverse. With more data centre being set up in the country, the demand for Ai super servers will continue to be strong for the next few years. On going, SNS has upgrade their offerings including cloud computing and cybersecurity solutions.

I foresee more to come for SNS. As many analysts quoted, the worst is over for technology sector. This connotation applies to darling SNS with in near term there is still 60% chance the price to go higher from its current value after one year. To support this statement, order book already hit above target, strong revenue growth driven by expansion plans and strategic contracts to be announced soon.

Warm regards,

Lily of the Valley