LGMS set to benefit from cybersecurity expansion

PETALING JAYA: LGMS Bhd’s near-term performance will likely depend on greater product awareness and the pace of regulatory enforcement, even though the sector’s long-term outlook remains favourable.

Given the early stage of market development and the gradual roll-out of compliance requirements, Kenanga Research maintained a measured view on LGMS’ short-term growth trajectory. It revised downward its financial year 2025 (FY25)/FY26 net profit forecasts by 21% and 14%, respectively, alongside a 14% and 13% cut in revenue, to account for the weaker first half of FY25 performance and more conservative growth assumptions in FY26.

The research house has not factored in the potential share of associate profit from the proposed 27% stake in Antarex Holdings Sdn Bhd, which carries a RM24.5mil cumulative profit guarantee over three years.

This is so since the acquisition is subject to conditions precedent under the share sales agreement, with deal completion targeted by the fourth quarter of FY25.

Kenanga Research estimates that the inclusion of the profit guarantee would result in a 9% and 12% uplift to FY25 and FY26 net profit respectively, which would, in turn, raise its FY26 target price by 10 sen.

The research house lowered its target price to 86 sen a share from RM1 previously, based on an unchanged FY26 price to earnings ratio of 30 times, in line with the peers’ forward mean.