Rammsol’s new app to drive earnings growth

PETALING JAYA: Ramssol Group Bhd’s diversification into a niche online marketplace via Rider Gate creates a new revenue vertical for the group, augmenting its earnings growth potential of its traditional human capital management business, says Maybank Investment Bank Research.

On Jan 18, Ramssol, via whole-owned subsidiary, RAMS AutoTech, officially launched Rider Gate, a domestic online marketplace for used motorbikes.

According to the research firm, Rider Gate differentiates itself from incumbents by offering a slew of auxiliary services including ownership transfer, inspections, insurance, extended warranties and smart financing.

It added that Ramssol has invested around RM10mil into the development of the platform and aims to be the “Carsome equivalent” for the Malaysian used motorbikes market. The global used motorbike market was valued at US$38.7bil in 2021 and is expected to grow at a ten year compound annual growth rate of 5.6% to reach US$66.2bil by 2031.

“Malaysia has an estimated 16.7mil registered motorbikes and was the 13th largest two-wheeler market in the world in 2023.

“With circa 500 to 600,000 bikes sold in Malaysia annually, facilitating transactions for just a small fraction of the pie could equate to tangible future earnings accretion for Ramssol,” the research house noted in a report on the company.

At the launch, the company disclosed it had onboarded 150 registered dealers onto the platform and aims to grow its network to 800 dealers spanning 3,000 outlets nationwide by end-2025.

During its trial phase in 2024, Rider Gate successfully executed 1,450 transactions.

“Our model has imputed for 2,500 transactions in financial year 2025 (FY25) to FY26 at a charge of RM85 per transaction yielding forecast revenue over core net profit accretion of RM6.4mil and RM1.3mil per annum for FY25 and FY26, respectively.

“With circa 20% net profit margins from Rider Gate, the platform could potentially drive secondary earnings growth for Ramssol in the years ahead,” said the research firm.

It maintains the RM1 a share target price and “buy” rating on the stock having previously imputed Rider Gate in its forecasts.

Shares of Ramssol were last done at 83.5 sen, translating into a market cap of RM300mil.