"Academy Ignition" – Earnings Beat Triggers Re-Rating

Investment Summary

We reiterate our BUY rating on Info-Tech Systems Ltd and raise our 12-month target price to S$1.39 (from S$1.00), reflecting a significant earnings beat and structural acceleration in the Academy training business. Our revised TP is derived from a blended 18× FY2026E P/E and 11× FY2026E EV/EBITDA methodology, cross-checked by a DCF valuation of S$1.42 per share.

Info-Tech delivered FY2025 revenue of S$56.5 million (+29% YoY), substantially exceeding our prior estimate of S$48.8 million by 16%. Reported NPAT rose 22% to S$15.0 million, while adjusted NPAT (excluding S$2.9 million one-off listing costs and Malaysia office relocation expenses) surged 46% to S$18.0 million. The surprise was driven overwhelmingly by the Academy training segment, whose services revenue exploded +184% YoY to S$15.0 million, accounting for 27% of group revenue versus 12% in FY2024.

With S$67.3 million cash on the balance sheet (net cash S$63.3 million), zero financial debt, a CRM product launched in February 2026, Dubai subsidiary under setup, and S$21.3 million of undeployed IPO proceeds remaining, we see further upside from organic and inorganic catalysts. The stock trades at 15.8× FY2025 adjusted P/E and a forward 14.5× on our FY2026E, a material discount to regional and global SaaS peers despite delivering superior growth, margins, and returns.

Key Metrics

Trading and Capitalisation (as at 5 March 2026)

1

†Note: FY2025 ROE is calculated on end-period equity of S$39.9 million. The YoY decline from the normalised FY2024 figure reflects the substantial increase in equity from S$28.7 million IPO proceeds received in July 2025, which nearly tripled the equity base. On an average-equity basis, FY2025 ROE would be approximately 68%. As equity continues to accumulate from retained earnings, we expect normalised steady-state ROE to settle in the 38–42% range from FY2026 onwards.

2

Business Overview

Info-Tech Systems Ltd is Singapore's leading cloud-based HRMS and accounting software provider for SMEs, with over 23,000 client organisations and 900,000+ active users. The company listed on the SGX Mainboard on 4 July 2025 as the first pure-play SaaS HR provider on the exchange, raising S$28.7 million in gross IPO proceeds.

The group operates five interconnected business lines: (1) flagship cloud HRMS covering 9 core HR modules (~69% of FY2025 revenue), (2) cloud accounting software (~4%), (3) Academy e-learning and WSQ-certified training (~27%), (4) Jobs Lah AI-driven job portal (currently non-monetised), and (5) hardware distribution (~4%). Geographically, Singapore accounts for 75.5% of revenue, Malaysia 18.3%, with growing operations in Hong Kong, India, and a newly incorporated subsidiary in Dubai (November 2025).

A key strategic development occurred on 2 February 2026, when the group launched its CRM software module, broadening its product portfolio toward a comprehensive one-stop SaaS solution for SMEs. The company also expanded its training facilities at Bendemeer and Jurong in Q4 2025 to support the Academy business's exceptional growth trajectory.

3

FY2025 Financial Highlights

Results Materially Exceeded Expectations

Info-Tech's FY2025 results significantly surpassed both our estimates and market expectations. Revenue of S$56.5 million was 16% above our prior forecast of S$48.8 million, while adjusted NPAT of S$18.0 million beat our S$14.7 million estimate by 22%.

Estimate Revision Bridge

The magnitude of the earnings beat warrants a clear bridge from our Initiation of Coverage (27 November 2025) estimates to the revised FY2026E forecasts:

The primary driver of the forecast upgrade is the Academy training segment, which delivered FY2025 services revenue of S$15.0 million — nearly three times our prior assumption. We now model FY2026E Academy revenue of approximately S$18.0 million (+20% YoY), reflecting expanded training facilities and a growing corporate training pipeline, but discounting the possibility that the FY2025 surge included some one-off or pull-forward demand. Subscription revenue is modelled at approximately S$43.5 million (+11% YoY), reflecting improving retention (94%) and cross-sell from the CRM launch.

Revenue Analysis

Group revenue rose 29.2% YoY to S$56.5 million (FY2024: S$43.7 million), driven by two powerful engines:

4

The standout performer was the Academy training segment, where services revenue surged 184% YoY to S$15.0 million. Management attributed this to stronger demand particularly in the second half of the year for WSQ-certified and corporate training courses. 2H2025 services revenue alone was S$12.7 million, a remarkable 373% surge from S$2.7 million in 2H2024, demonstrating powerful second-half acceleration.

Note on Academy seasonality: The company's financial statements state that the group's businesses are "not affected significantly by seasonal or cyclical factors" (Note 3). However, the Academy's revenue profile in FY2025 was heavily 2H-weighted (S$12.7 million in 2H versus S$2.3 million in 1H). We believe this skew reflects the rapid ramp-up of a young business line — training course registrations exceeded 4,000 by 1H2025, and facilities were expanded at two Singapore locations in Q4 2025 to support accelerating demand — rather than inherent seasonality. Nonetheless, investors should monitor the 1H/2H split in FY2026 to confirm whether the Academy has reached a more normalised run-rate or whether 2H concentration persists.

Academy Revenue Sensitivity Analysis

Given the Academy segment now accounts for 27% of group revenue and is the primary variable in our FY2026E forecast, we present a sensitivity analysis on group earnings to different Academy growth scenarios:

Assumptions: Subscription revenue of S$43.5m and hardware of S$2.5m held constant across scenarios; gross margin 85.2%; opex ratio and tax rate consistent with base case. Even in the bear scenario where Academy revenue stalls entirely, group EPS of 6.78 cents implies a forward P/E of 16.2× at S$1.10 — still reasonable for the quality of the subscription base.

5

All three geographic segments posted strong growth. Singapore revenue benefited from Academy training demand (+30% YoY), while Malaysia maintained its expansion momentum (+25% YoY). The "Others" segment (Hong Kong, India, Dubai) grew fastest at +33% YoY, though it remains loss-making at the PBT level as the group invests in market development.

Profitability

Gross profit rose 29% to S$48.1 million, maintaining an 85.2% gross margin, consistent with the pure-SaaS business model. Reported operating profit grew 27% to S$18.9 million despite S$2.9 million in one-off IPO listing costs. Adjusting for this and one-off relocation expenses, the group's adjusted NPAT would have been S$18.0 million, representing a 46% YoY increase.

Employee benefits expenses rose 22% to S$22.7 million (40% of revenue), reflecting headcount growth to support Academy training delivery and regional expansion. R&D spend was S$4.2 million (7.4% of revenue), up 13% YoY, funding the CRM module launched in February 2026 and continued platform enhancements.

The effective tax rate was elevated at 21.2% (FY2024: 17.2%), primarily due to non-deductible IPO listing costs and higher intercompany royalty remittances. This should normalise in FY2026 as one-off items wash out.

Cash Flow and Balance Sheet

The balance sheet emerged in its strongest-ever position. Cash and cash equivalents totalled S$67.3 million at 31 December 2025 (FY2024: S$29.7 million), bolstered by S$28.7 million IPO proceeds and S$16.8 million operating cash flow. With total lease liabilities of S$4.0 million as the only financial obligations, net cash stands at S$63.3 million, representing approximately S$0.245 per share or 22% of the current market capitalisation.

Operating cash flow of S$16.8 million translated to free cash flow of S$15.9 million (capex: S$1.0 million), yielding an FCF/PAT ratio of 106%. We note that operating cash flow declined from S$18.0 million in FY2024 despite a 22% increase in profits. This was primarily driven by a S$7.4 million increase in trade and other receivables (reflecting the sharp ramp in Academy training revenue, where corporate clients typically settle on longer payment cycles than subscription billings), partially offset by a S$3.3 million increase in trade payables and a S$3.3 million increase in contract liabilities. We expect working capital to normalise in FY2026 as the receivables cycle matures, supporting our forecast of S$20.0 million operating cash flow.

6

7

4. Regional Expansion Momentum Across All Markets

All geographies delivered double-digit growth: Singapore +30%, Malaysia +25%, and Others +33%. Malaysia segment PBT of S$3.3 million (margin: 32%) demonstrates the market has reached profit maturity, while the Dubai subsidiary incorporated in November 2025 signals a longer-term Middle East strategy not yet reflected in valuations. India remains in investment phase but offers a massive addressable market.

5. Valuation Discount Persists Despite Superior Fundamentals

At 15.8× FY2025 adjusted P/E and 14.5× on our FY2026E, Info-Tech trades at a meaningful discount to regional and global HCM/SaaS peers. Given Info-Tech's 22% revenue CAGR (FY2022–25), 85%+ gross margins, and 38%+ ROE, the current multiple reflects insufficient market recognition of the company's quality and growth profile.

Valuation and Target Price

Revised Target Price: S$1.39 (from S$1.00)

We raise our 12-month target price to S$1.39, reflecting upgraded FY2026E estimates following the significant FY2025 earnings beat. Our revised TP is derived from a blended approach:

Method 1: P/E Multiple (50% Weight)

• Apply 18.0× P/E (raised from 16× to reflect proven Academy monetisation and earnings momentum; a premium to Humanica's 12.3× forward P/E but a discount to US SaaS peers at 20–22× forward P/E)
• FY2026E EPS: 7.61 cents
• Implied price: S$1.37

Method 2: EV/EBITDA Multiple (50% Weight)

• Apply 11.0× EV/EBITDA (raised from 10× given higher earnings quality; Humanica at 8.5×, US peers at 22–46×)
• FY2026E EBITDA: S$27.5 million
• Implied EV: S$302 million
• Add Net Cash: S$63.3 million
• Implied Equity: S$365 million ÷ 258 million shares
• Implied price: S$1.42

8

DCF Cross-Check

• 5-year FCF projections growing at 8–15% CAGR, terminal growth 2%, WACC 10%
• DCF equity value: S$1.42 per share – supports base case
• Sensitivity: at 11% WACC, DCF yields S$1.28; at 9% WACC, S$1.60

Blended Target Price: S$1.39

This target aligns with the direction of CGS International's recent price target raise to S$1.35 (from S$1.10) with an Add rating, reflecting the market's broader earnings upgrade cycle.

Valuation Scenarios

9

Peer Comparison

Source: StockAnalysis.com as at 5 March 2026. Trailing metrics shown for Humanica, Workday, and Paylocity; forward P/E based on consensus estimates where available. Info-Tech forward estimates are Tickrs Financial Singapore estimates.

†Humanica revenue growth based on FY2024 annual revenue of THB 1.47 billion (+10.0% YoY per StockAnalysis.com). ††Workday and Paylocity revenue growth reflects TTM figures. Paylocity's fiscal year ends June; recurring revenue growth was approximately 14% in Q1 FY2026 (ended September 2025).

Commentary on peer multiples: Info-Tech trades at a forward P/E discount of approximately 15–25% to Humanica and 25–35% to US SaaS peers. We acknowledge that direct comparison with US large-cap SaaS is imperfect given the vast differences in market capitalisation, liquidity, and institutional ownership. However, the comparison is instructive in highlighting Info-Tech's superior profitability (85%+ gross margins, 38%+ ROE, 3.2% dividend yield) relative to even much larger peers. The more relevant regional peer, Humanica, trades at a similar EV/EBITDA but with meaningfully lower growth and profitability metrics.

Catalysts and Risks

Near-Term Catalysts (0–6 Months)

1. Final Dividend Payment (15 May 2026) – 1.95 cents per share; reinforces income appeal

2. CRM Module Adoption Metrics– Launched 2 February 2026; early uptake data could drive re-rating

10

3. 1H2026 Results (August 2026)– First clean-run earnings without listing costs; margin expansion visibility; also key test of whether Academy revenue profile normalises across halves

4. IPO Proceeds Deployment– S$21.3 million remaining; M&A or significant product investments expected

Medium-Term Catalysts (6–18 Months)

1. Dubai Operations Commencement – Middle East revenue contribution signals TAM expansion

2. Academy Revenue Durability – Sustained growth validates second engine thesis

3. Potential M&A – Cash war chest enables accretive acquisitions in adjacent markets or capabilities

11

Dividend and Balance Sheet Commentary

Info-Tech's dividend track record since listing has been exemplary. The FY2025 total payout of 3.50 cents per share (60% of reported earnings, 50% of adjusted) exceeded our expectations and demonstrates management confidence in sustainable cash generation. We forecast FY2026E DPS of 3.80 cents (50% of estimated earnings), translating to a 3.5% yield at current price.

The balance sheet is a key differentiator. Net cash of S$63.3 million equates to S$0.245 per share, providing approximately 22% downside floor relative to the current share price. Zero financial debt (only S$4.0 million in operating lease liabilities) and a current ratio of 1.99× underpin the group's financial flexibility. The company generates more cash than it earns (FCF/PAT: 106%), confirming earnings quality.

ESG and Strategic Commentary

Info-Tech's core business is inherently aligned with positive social impact: democratising enterprise-grade HR technology for SMEs, enabling accurate and timely payroll for 900,000+ workers, and upskilling the workforce through its Academy platform. The shift from on-premise to cloud reduces per-SME energy consumption and paper usage through e-payslips and digital workflows.

Post-listing governance structures are in place with independent audit and remuneration committees, and institutional cornerstone investors (Maybank AM, Lion Global, Nikko AM) provide ongoing scrutiny.

Recommendation

We reiterate BUY and raise our target price to S$1.39 (from S$1.00), implying 26% upside from current levels. Info-Tech's FY2025 results mark an inflection point: the Academy business has emerged as a powerful second growth engine alongside the core subscription HRMS, delivering 29% revenue growth and 46% adjusted profit growth in a year burdened by S$2.9 million one-off listing costs.

At 14.5× FY2026E P/E with a 3.5% forward dividend yield, 85%+ gross margins, and S$63 million net cash, Info-Tech offers a compelling growth-and-income proposition within the SGX small-cap technology space. The "Academy Ignition" has lit the afterburner – and the re-rating is just getting started.

12

Appendix: Financial Summaries

Consolidated Income Statement (S$ thousands)

13

Valuation Footnotes

• FY2025 adjusted figures exclude S$2.93 million one-off IPO listing expenses and Malaysia office relocation costs
• EPS calculated on 258 million shares (post share-split and IPO issuance)
• P/E and EV/EBITDA multiples use S$1.10 share price; EV = Market Cap minus net cash (cash less total lease liabilities)
• Peer data sourced from StockAnalysis.com as at 5 March 2026; all peer metrics are trailing twelve months unless stated as forward. Forward P/E uses consensus estimates where available. Note that Workday's trailing P/E (93.1×) reflects GAAP accounting including stock-based compensation; its forward P/E of 21.7× reflects non-GAAP consensus.
• FY2026E estimates are Tickrs Financial Singapore estimates; no consensus estimates available

14

Analyst Certification and Disclaimer

Analyst Certification: I, Jaimes Chao, hereby certify that the views expressed in this report accurately reflect my personal opinions about Info-Tech Systems Ltd and its securities. I also certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report.

Disclaimer:

This report has been prepared by Tickrs Financial Singapore Pte Ltd (“TFS”), a licensed capital markets services holder and an exempt financial advisor in Singapore. It is provided for informational purposes only and does not constitute an offer, invitation, or solicitation to buy or sell any securities, investments, or financial instruments.

The information, opinions, and estimates contained herein are based on publicly available sources (including company filings, SGX announcements, financial statements, and reputable news providers) believed to be reliable, but TFS makes no representation or warranty as to the accuracy, completeness, or timeliness of such information. Any forward-looking statements are based on certain assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. There is no assurance that any forward-looking statements will materialize. Past performance is not indicative of future results.

TFS and its affiliates, and each of their respective directors, officers, employees, connected parties, associates and agents (“Representatives”), shall not be liable for any direct, indirect or consequential losses, loss of profits and/or damages arising from the use or reliance upon this report. The views expressed reflect the personal opinions of the analyst(s) and do not necessarily represent those of TFS or its Representatives

This report does not take into account the specific investment objectives, financial situation, risk profile, or needs of any person who may receive or read it. Readers should independently evaluate the information herein and seek advice from a licensed investment adviser regarding the appropriateness of any securities, instruments, or strategies mentioned.

Conflict of Interest Disclosure:

The analyst(s) responsible for this report certify that they have not received and will not receive direct compensation in exchange for any specific recommendation. As of the date of this publication, TFS, its directors, officers, and research staff do not have any proprietary financial interest in Info-Tech Systems Ltd or its securities. TFS has not received any investment banking fees from Info-Tech Systems Ltd the past 12 months, and no part of TFS’s compensation is tied to the specific recommendations in this report.

Risk Disclosure:

Investing in equities, especially small- and mid-cap stocks, involves risk, including the risk of loss of principal. Investors should consider their own objectives and risk tolerance before making any investment decisions.

Copyright:

© 2026 Tickrs Financial Singapore Pte Ltd. All rights reserved. This report is confidential and may not be reproduced, redistributed, or published in whole or in part without the prior written consent of TFS.