INDUSTRY OUTLOOK

Growing addressable market supports expansion. The total addressable market for cloud-based HRMS and accounting software across Singapore, Malaysia, Hong Kong and India remains underpenetrated and is expected to expand steadily in the coming years. Industry research estimates that the SME-focused HRMS and accounting software segment across these four markets was valued at approximately USD3.3bn in 2024, compared to a broader total addressable market of around USD17.3bn, based on the assumption of full SaaS HRMS and accounting software adoption among SMEs, underscoring substantial growth headroom. The segment is projected to

reach USD4.3bn by 2027F, implying an estimated c.10% CAGR, supported by ongoing digitalisation, government incentives and increasing SME formation.

While Singapore provides a stable revenue base, relatively less penetrated and faster-growing markets such as Malaysia and India offer meaningful expansion opportunities. Based on company estimates, the combined HRMS and accounting software markets across its core operating regions are expected to grow at an average 8.6% CAGR over the next few years.

Essential and defensive characteristics support recurring revenue. HRMS and accounting platforms are deeply embedded in daily business operations, managing payroll, statutory compliance, workforce administration and financial reporting functions that remain largely non-discretionary even during economic slowdowns. Their integration into core processes, coupled with high switching costs, makes them inherently defensive, as businesses are unlikely to replace or discontinue these systems in challenging periods.

The transition to subscription-based SaaS models further enhances revenue visibility, with customer retention rates typically exceeding industry averages. As SMEs continue to prioritise automation and operational efficiency, providers of integrated, end-to-end HR and finance solutions are well positioned to benefit from stable recurring revenue streams and sustained user adoption, even amid macroeconomic volatility.

DBS Group Equity Explorer return ratings reflect return expectations based on an assumed earnings profile and valuation parameters

1 (>20% potential returns over the next 12 months)

2 (0 - 20% potential returns over the next 12 months)

3 (negative potential return over the next 12 months)

The risk assessment is qualitative in nature and is rated as either high, low or moderate risk. (see section on risk assessment)

Note that these assessments are based on a preliminary review of factors deemed salient at the time of publication. DBSV does not commit to ongoing coverage and updated assessments of stocks covered under the Equity Explorer product suite. Such updates will only be made upon official initiation of regular coverage of the stock.

Completed Date: 13 Feb 2026 06:23:37 (SGT)

Dissemination Date: 13 Feb 2026 06:31:28 (SGT)

Sources for all charts and tables are DBS unless otherwise specified.

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