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Company Note | Alpha series     IT Services | Singapore     August 12, 2025

Singapore

ADD

Consensus ratings*: Buy 0 | Hold 0 | Sell 0
Current price: S$0.83
Target price: S$1.10
Previous target: na
Up/downside: 32.5%
CGSI / Consensus: na
Reuters: INFT.SI
Bloomberg: ITSL SP
Market cap: US$166.5m
Average daily turnover: US$0.84m
Current shares o/s: 258.0m
Free float: 27.5%

Info-Tech Systems

Set to win headcounts and accounts
  • We initiate coverage on Info-Tech (ITL), Singapore’s only publicly-listed SaaS-based HRMS provider, with an Add call and a TP of S$1.10.
  • Following its IPO in Jul 2025, we estimate ITL has c.S$60m cash, which it can deploy for aggressive expansion in growth markets Malaysia and India.
  • In our view, ITL’s asset-light model could drive more than 80% ROE in FY25F and 14% core net profit CAGR over FY24-27F.
ITL offers a purpose-built, affordable solution for SMEs
Info-Tech (ITL) provides essential HR and accounting solutions through its proprietary cloud-based platforms to SMEs in Singapore, Malaysia, India and Hong Kong. As of Jun 2025, it had 25,300 HRMS customers and a robust 94% retention rate. Around 50% of its annualised 1H25 revenues were recurring, based on our estimates. Compared to its local peers in Singapore, ITL’s HRMS offers more functions and has lower recurring fees (S$2.5 per employee per month vs. peers’ S$6.2), which we think helped it capture a 10% market share in Singapore in 2024 (estimate by commercial research firm Converging Knowledge)
Added 2,500 customers in 1H25, primarily in Malaysia and India
In 1H25, ITL’s revenues grew 5% yoy to S$22.4m, largely driven by 2,500 net new HRMS customers added since end-2024 (vs. 3,000 net additions in 2024). These customers were mostly from Malaysia and India. Its core operating margin contracted 1.2% pts yoy to 37.4% in 1H25 mainly due to employees hired for its new office in India, which we expect to normalise from FY26F. ITL’s Singapore HRMS revenues in 1H25 were broadly flat yoy but, in its analyst briefing on 11 Aug 25, management guided for stronger growth in 2H25F, driven by increased advertising spend. ITL declared an interim dividend of 1.55 Scts for 1H25, implying a 48% core payout ratio and 4% annualised dividend yield, and targets a 50% payout ratio for FY25F-26F, as per its IPO prospectus.
c.S$60m cash and >80% ROE to support expansion in new markets
As of end-Jun 2025, ITL held net cash of S$34m, excluding another S$23m of net proceeds from its IPO listing on SGX in Jul 2025. We forecast FY25F ROE of over 80% given its asset-light model, minimal capex needs and c.30% net margin. We think ITL is wellpositioned to ramp up sales and marketing in high-growth countries Malaysia and India, where we forecast it to see FY24-27F revenue CAGR of c.18% and c.29%, respectively.
Initiate coverage with an Add call and a TP of S$1.10
Initiate coverage with Add as we think it is poised to benefit from deeper market penetration (Malaysia, India) and greater adoption of new products (Accounting, Academy). Our TP of S$1.10 is based on 17x 2026F P/E, a 50% discount to global peers due to its smaller scale despite superior FY25F ROE (above 80% vs. peers’ 23%) and dividend yield (4% vs. peers’ 1%). Key re-rating catalysts: higher-than-expected growth in number of customers, and greater government grants to support SME adoption of digital tools. Downside risks: heightened competition, and macroeconomic uncertainty impacting customer retention.
Financial Summary
Dec-23A Dec-24A Dec-25F Dec-26F Dec-27F
Revenue (S$m) 38.06 43.71 48.50 52.73 57.03
Net Profit (S$m) 10.49 12.34 14.06 16.80 18.45
Core EPS (S$) 0.047 0.055 0.058 0.065 0.072
Core EPS Growth 46.0% 17.7% 6.2% 11.8% 9.8%
FD Core P/E (x) 17.81 15.13 14.26 12.75 11.61
Price To Sales (x) 4.91 4.27 4.13 4.06 3.75
DPS (S$) 0.031 0.056 0.031 0.033 0.036
Dividend Yield 3.75% 6.69% 3.73% 3.92% 4.31%
EV/EBITDA (x) 11.16 9.23 10.37 6.27 5.52
P/FCFE (x) 26.74 12.49 14.68 8.99 9.87
Net Gearing (409%) (746%) (209%) (193%) (178%)
P/BV (x) 42.88 46.90 7.58 5.69 4.57
ROE 407% 296% 87% 51% 44%
% Change In Core EPS Estimates
EPS/Consensus EPS (x)
SOURCES: CGSI RESEARCH ESTIMATES, COMPANY REPORTS

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CGS INTERNATIONAL SECURITIES USA, INC AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. Powered by the EFA Platform

Set to win headcounts and accounts

List of abbreviations

HRMS: Human Resource Management System

SME: Small and Medium Enterprises

ERP: Enterprise Resource Planning

SaaS: Software-as-a-Service

Investment thesis
ITL provides a purpose-built solution for SMEs

Affordable product portfolio

Based on our channel checks, we understand that HR modules within ERP systems like SAP and Oracle are often complex and too expensive for SMEs. These platforms are built for scale and complexity, as reflected in their pricing models, which start from US$70 per user per month, with one-off implementation costs ranging between US$10,000 and US$150,000. We believe this creates a cost-value mismatch for SMEs as they must pay enterprise-level prices for functionality they do not need and cannot easily deploy.
In contrast, ITL’s HRMS is a value-for-money product targeted at SMEs. ITL provides more HR modules at a low price of S$2.5 per employee per month compared to peers’ average of S$6.2 (Fig 1) in Singapore. For the first year implementation costs, ITL’s packages are below peers’ for small companies (fewer than 50 employees). SMEs in Singapore can claim up to 50% of their digital tool costs under the government’s Productivity Solutions Grant (PSG); ITL is an approved HRMS provider under PSG. In addition, ITL has quick customer support turnaround time of 4 hours compared to the industry average of 1-3 working days from the time an enquiry is made (source: Converging Knowledge).
Geographic expansion for cross-border SME activities

ITL’s expansion into Malaysia, particularly in areas such as Johor, positions it well to serve SMEs operating across borders by providing a unified digital infrastructure for HR and accounting operations, in our view. According to our ground checks, HRMS solutions that support cross-border workflow and regulatory compliance are highly valued by companies with operations extending beyond Singapore. We believe ITL’s cloud-based, SaaS solutions strengthen its role as a partner for multinational SME expansion.

Strong profitability despite price competitiveness
Despite positioning itself as an affordable and value player, ITL’s operating margins expanded 3.3% pts from 30.8% in FY22 to 34.1% in FY24. This was largely driven by shifting its customer support staff and R&D experts to lower-cost countries like Malaysia and India. As seen in Fig 2, ITL added 77/95 employees in Malaysia/India over 2022-24 but only 21 in Singapore, which we estimate reduced average cost per employee for the group by 5-7% yoy over FY22-24.

Subscription model drives recurring revenues and robust cash flow generation

ITL’s subscription-based model underpins a growing recurring revenue stream, which formed 51% of annualised 1H25 revenues while the remaining c.49% came from one-time implementation packages and non-subscription-based products. Customers typically sign 12-month contracts paid upfront. This structure drives strong cash flow generation given ITL’s minimal inventory and capex requirements and low cost base. As of end-Jun 2025, ITL had no borrowings and was in a net cash position of S$33.7m, excluding net IPO proceeds of S$23.4m. According to ITL, it had a strong 94% customer retention rate in 1H25, up from 91% in FY24, which we think reflects high customer satisfaction and supports more predictable revenue growth.

Valuation and recommendation Initiate coverage with a TP of S$1.10

We initiate coverage on ITL with an Add rating and a target price of S$1.10, representing 33% upside potential from the 11 Aug 2025 share price of S$0.83. We like ITL for its 1) expansion plans into new geographies, 2) strong cash flow generation, and 3) 14% net profit CAGR over FY24-27F.
We value ITL using a P/E valuation methodology given our expectations for roughly 30% net profit margin p.a. for FY25F-27F. Our TP is based on 2026F P/E of 17x, which is a 50% discount to global peers given its smaller size despite ITL’s superior ROE (above 80% vs. peers’ 23%) and dividend yield (4% vs. peers’ 1%) for 2025F. Our peer group comparison includes pure HRMS as well as diversified ERP companies listed in Asia and globally. We note that pure HRMS companies are fragmented in the local markets and largely unlisted. We believe that our discount factor takes into account ITL’s lack of large-scale ERP systems as well as its limited operating geographical areas (Malaysia, Singapore, India and Hong Kong) vs. global companies that have a wider regional reach.

Key re-rating catalysts

Faster-than-expected customer acquisition in growth markets: Following its IPO in Jul 2025 where it received net proceeds of S$23.4m, ITL plans to ramp up marketing campaigns and expand its on-ground salesforce, especially in Malaysia’s secondary cities (e.g. Johor, Penang) and India’s major metros. Faster-than-expected customer acquisition could drive market share gains and higher revenue growth than our forecasts.

Margin expansion from cost optimisation and operating leverage: Since 2018, ITL has proactively shifted its R&D and customer support staff to lower-cost countries to expand margins. Further cost optimisation by shifting to tier 2 cities, such as Madurai where ITL’s new office is located, could lift margins. Additionally, ITL is ramping up sales and marketing efforts to deepen market penetration in Malaysia and India. As customer acquisition costs stabilise in these newer markets and revenue from existing customers scales, higher-than-expected operating leverage could drive net margins beyond our forecast c.30% annual levels for FY25F-27F.

Greater government support for SME digitalisation: Increased allocation of government grants and incentives in Singapore, Malaysia, and India to encourage SMEs to adopt digital tools could accelerate ITL’s customer count. In Singapore, schemes like the Productivity Solutions Grant already subsidise a significant portion of subscription costs for SMEs. Any announcement of increases in government support for SMEs to digitalise could be a tailwind for the stock as more SMEs could be encouraged to take up ITL’s subscription products, in our view.

Key downside risks

Heightened competitive pressures in a fragmented market: ITL faces competition from both domestic and international HR and accounting software providers, ranging from full-suite ERP platforms to legacy systems and manual processes. Larger enterprise-focused providers could move downmarket to target SMEs, leveraging their greater resources to innovate and capture share. Downside risks also come from local peers or new entrants in ITL’s markets offering comparable solutions at aggressive pricing. These could erode ITL’s competitive position and limit customer adoption.
Macroeconomic uncertainty impacting customer retention and customer acquisition: As an SME-focused SaaS business, ITL’s revenue is primarily driven by its ability to attract new customers and grow recurring revenue from existing ones. Increased business closures or reduced SME budgets amidst prolonged downturns could impact subscription renewals and upselling opportunities. ITL may also need to increase spend on customer acquisition, which could negatively impact margins.

Company background
Introduction

Info-Tech Systems Limited (ITL) is a cloud-based HRMS and accounting software provider for SMEs. Its offices are located across Singapore, Malaysia, Hong Kong and India. ITL operates under a SaaS model, through which it generates subscription-based revenues from its HRMS and proprietary accounting software. It also provides after-sales service during implementation and ongoing support to customers through dedicated support specialists.
As of end-Jun 2025, ITL’s HRMS was used by 25,300 customers covering 906,000 active users. Its 2022-launched Info-Tech Accounting Software is used by 1,400 customers as at end-Jun 2025. ITL is an approved digital services provider under Singapore government’s Productivity Solutions Grant, which means SMEs can receive up to 50% of government funding for ITL’s HRMS packages for the first year (see Fig 1). As per an industry report by Converging Knowledge, ITL had around 10% share in Singapore’s cloud-based SaaS SME HRMS and accounting software market, as of 2024.
We believe ITL has strengthened its competitive edge by expanding its ecosystem to other product lines, such as payroll outsourcing, Workforce Skills Qualification (WSQ) -approved Academy courses, and an artificial intelligence (AI) -driven job portal, Jobs Lah.

Key products

Subscription-based

ITL’s subscription-based model drives strong cash flow as most customers pay upfront for their subscription period, resulting in high deferred revenue (recorded as contract liabilities) and minimal inventory needs. Customers typically sign 12- month contracts, with subscription fees based on the number of modules and employees covered. Revenue is recognised evenly over the subscription period. ITL had strong retention rates of 87.0%/90.1%/91.0% in FY22/FY23/FY24, which we think reflects high customer satisfaction. As per ITL, the primary reason for most non-renewals is the closure of the SME business, rather than competition from other HR and accounting software providers.

HRMS: Launched in 2016, ITL’s cloud-based HRMS has grown from four to nine modules, namely HR software, time attendance, payroll, leave management, claims, e-scheduling, performance appraisal, project costing and applicant tracking. As of Jun 2025, ITL had 25,300 customers for its HRMS. The SaaS platform eliminates the need for on-premise infrastructure and automates time-consuming and error-prone processes, such as attendance tracking, payroll and employee data management, according to ITL. The tool also gathers feedback and assesses performance. Separately, DigiSME is ITL’s simplified HRMS and accounting solutions tailored for micro-SMEs in Singapore and Malaysia that do not require the full suite of modules. Instead, they can opt for 3 core modules – time attendance, payroll and leave management. ITL’s proprietary HRMS was developed in-house by its internal software development team and localised and tailored to each jurisdiction it operates in. In 2025, ITL also launched its cloud-based Learning Management Systems (LMS) in Malaysia and Hong Kong, which allows organisations to provide training and educational content remotely. LMS customers can create customised courses and online assignments. It can also be integrated with its HRMS to allow managers to monitor employee progress and training.

Accounting software: ITL launched its cloud-based accounting software in 2022. This grew from around 100 customers at end-2022 to 1.4k by end-Jun 2025. Around 25% of its accounting software users also use its HRMS, said the company. The software supports core business functions like invoicing, billing, inventory management, bank reconciliation, and reporting. A simplified version for early-stage businesses is also offered under DigiSME, featuring a 50-transaction monthly limit, single-currency display and no inventory functionality. ITL’s HRMS and accounting software are hosted on Microsoft Azure data centres located within or near each operating jurisdiction.

Services

Payroll outsourcing: Since 2022, ITL has been handling the payroll processing and related services for over 100 companies. ITL offers a suite of payroll-related services, such as calculating employee salaries and filing tax returns. As per ITL, its HR software automates much of the payroll process and is customisable to cater to the specific payroll needs of each business.

Academy: Launched in 2023, ITL’s Academy has 12 WSQ-approved courses focused on topics such as HRMS integration, practical HR and accounting training, digital office skills and generative AI. As of end-Jun 2025, the Academy had over 4,000 registrations. Its revenue rose from S$1.5m in FY23 to S$3.3m in FY24.

Jobs Lah: Also launched in 2023, Jobs Lah is an AI-powered job portal where employers can post job openings and job seekers can search for opportunities within Singapore and Malaysia. Although it currently does not generate revenue, it has a network of over 100,000 job seekers and 7,000 employers, which also acts as a database for potential leads for other products, as per ITL. We believe these initiatives position ITL as an integrated workforce solutions provider that can meet the evolving needs of SMEs across the region.

Hardware

ITL sells access control and data collection hardware systems, including radiofrequency identification (RFID) card readers, biometric fingerprint readers and facial recognition systems. The hardware systems are integrated and can be synced with ITL’s HRMS systems. ITL also provides repair and maintenance services for these hardware products. Most of ITL’s hardware system sales are transacted on a payment-in-advance basis.

Clients

ITL’s HRMS is used by companies across Singapore, Malaysia, Hong Kong, and India, including government bodies, SMEs and large enterprises across diverse sectors. Its HRMS customer base expanded at a CAGR of 19% in FY22-24 to 22,800 as of end-2024. Its revenue is well diversified, with its top 10 customers accounting for less than 3% of total revenue each year over FY22-24 and spanning sectors such as F&B, logistics, education, security, and cleaning

Future plans

Grow market share in existing geographies

Converging Knowledge estimates that ITL had c.10% and c.1% of the cloudbased SaaS HRMS & accounting software market for SMEs in Singapore and in Malaysia, respectively, as of 2024. We estimate its share in India is quite small as it started generating HRMS revenues there only since 2024. In order to grow its share in its existing markets, ITL plans to 1) invest in its in-house sales and marketing team to deepen client engagement, 2) intensify marketing efforts across digital and traditional platforms, and 3) collaborate with third-parties (e.g. financial institutions) to introduce offerings to their SME clients.

Expand solutions portfolio

To offer a more comprehensive suite of offerings to SMEs, ITL is in the development process for a new Customer Relationship Management (CRM) software that it plans to launch in 1H26F. Other potential tools in its pipeline include a Point-of-Sale system and a Field Service Management software. ITL is also investing in its R&D capabilities to strengthen its HRMS product through modules such as Learning Management software, AI Talent Acquisition and Onboarding HR solution.

Increase geographic presence

ITL intends to continue introducing its products in external markets following the successful pickup in Singapore. For example, ITL is planning to launch Academy in Malaysia given its growth in Singapore since 2023. In its prospectus, ITL also said it was exploring inorganic acquisitions to access new markets, gain market share and expand its portfolio.

Industry outlook
Tapping into a US$17bn market opportunity

ITL operates in a large and underpenetrated market, with the SME cloud-based HRMS and accounting software segment in its 4 key geographies valued at US$3.3bn in 2024, only 19% of the estimated US$17.3bn total addressable market for these 4 countries (source: Converging Knowledge). We think this segment benefits from structural trends such as accelerated digital adoption postCovid-19, hybrid work trends, rising SME formation and supportive government grants. Converging Knowledge estimates this segment in ITL’s 4 markets to grow to a combined US$4.3bn by 2027F (+10% CAGR over 2024-27F).

Government policies towards digitalisation create a favourable regulatory environment for SMEs

Singapore

Between 2020 and 2024, Singapore’s number of registered SMEs grew by 44,600 companies, almost double the pre-Covid-19 increase of 22,700 over 2016-20, according to the Singapore Department of Statistics. The Singapore government continues to be a strong advocate for SME digital transformation, as highlighted through programmes like SMEs Go Digital, which includes the Productivity Solutions Grant and Start Digital. Details of key government programmes introduced to help SMEs enhance productivity and adopt new technologies are:

Productivity Solutions Grant (PSG): Launched in 2018, PSG provides financial support for SMEs adopting productivity-enhancing solutions, such as automation, customer management software, and data analytics tools. It reimburses 50% of eligible costs up to S$30,000 for local SMEs.

Enterprise Development Grant (EDG): This grant helps SMEs upgrade and innovate their businesses by offering funds for projects in areas like automation, process reengineering, and market expansion. Local SMEs can claim up to 50% of eligible costs. Some sustainability-related projects may also be supported by up to 70%.

SkillsFuture: Focused on upskilling and reskilling the workforce, SkillsFuture offers courses in IT, data analytics, cybersecurity, and HRMS/accounting, supporting the adoption of cloud-based SaaS HRMS and accounting software solutions in the marketplace.

Malaysia

Some of Malaysia’s policies and initiatives to boost digitalisation include:

Grants: The Malaysian government has rolled out grants like the Smart Automation Grant (SAG) and MSME Digital Grant to help businesses digitalise. These initiatives, alongside tax incentives for flexible work arrangements, are aimed at encouraging SMEs to adopt HRMS solutions. Moreover, new regulations, such as the e-Invoice initiative and mandatory compliance with the Employment Act 1955, make automated systems essential for businesses to ensure compliance and efficiency.

MyDIGITAL: Other government initiatives, particularly the Malaysia Digital Economy Blueprint (MyDIGITAL), aim to foster a business-friendly environment that supports technological advancements. MyDIGITAL targets to boost the digital economy's contribution to GDP from 15.6% in 2020 to 22.6% by 2025, creating a landscape for SaaS adoption and innovation.

India

Some key initiatives by the Indian government to enable SME digitalisation include:

Digital India Programme Digital India is a flagship initiative aimed at transforming India into a digitally empowered society and knowledge economy. For SMEs, it improves access to high-speed Internet and digital tools, especially in underserved areas, making SaaS adoption more feasible. It also offers digital skill development programmes and simplifies administrative processes through e-governance, enabling SMEs to navigate regulatory systems online with greater ease and efficiency

MSME Digital Transformation Schemes: The Ministry of MSME has rolled out schemes to help small businesses digitise. These include the Udyam registration portal, which streamlines MSME registration and provides access to financial assistance for upgrading digital infrastructure (including SaaS solutions) and to credit schemes that reduce the cost burden of investing in new technologies.

Government-Supported Incubators and Accelerators: Programmes like T-Hub and Startup India Hub provide startups with funding, mentoring, and market access. These incubators create a dedicated environment for digital innovation.

Porter’s 5 forces analysis

Using Porter’s 5 forces analysis, we determine that the cloud-based SaaS HRMS and accounting software market is moderately competitive. Industry rivalry is high due to multiple available vendors but high implementation costs hold back customers from switching between vendors. Government incentives create opportunities for new entrants but they must build credibility given the sensitive nature of data stored by customers.

Government policies towards digitalisation create a favourable regulatory environment for SMEs

Singapore

Between 2020 and 2024, Singapore’s number of registered SMEs grew by 44,600 companies, almost double the pre-Covid-19 increase of 22,700 over 2016-20, according to the Singapore Department of Statistics. The Singapore government continues to be a strong advocate for SME digital transformation, as highlighted through programmes like SMEs Go Digital, which includes the Productivity Solutions Grant and Start Digital. Details of key government programmes introduced to help SMEs enhance productivity and adopt new technologies are:

Productivity Solutions Grant (PSG): Launched in 2018, PSG provides financial support for SMEs adopting productivity-enhancing solutions, such as automation, customer management software, and data analytics tools. It reimburses 50% of eligible costs up to S$30,000 for local SMEs.

Enterprise Development Grant (EDG): This grant helps SMEs upgrade and innovate their businesses by offering funds for projects in areas like automation, process reengineering, and market expansion. Local SMEs can claim up to 50% of eligible costs. Some sustainability-related projects may also be supported by up to 70%.

SkillsFuture: Focused on upskilling and reskilling the workforce, SkillsFuture offers courses in IT, data analytics, cybersecurity, and HRMS/accounting, supporting the adoption of cloud-based SaaS HRMS and accounting software solutions in the marketplace.

Malaysia

Some of Malaysia’s policies and initiatives to boost digitalisation include:

Grants: The Malaysian government has rolled out grants like the Smart Automation Grant (SAG) and MSME Digital Grant to help businesses digitalise. These initiatives, alongside tax incentives for flexible work arrangements, are aimed at encouraging SMEs to adopt HRMS solutions. Moreover, new regulations, such as the e-Invoice initiative and mandatory compliance with the Employment Act 1955, make automated systems essential for businesses to ensure compliance and efficiency.

MyDIGITAL: Other government initiatives, particularly the Malaysia Digital Economy Blueprint (MyDIGITAL), aim to foster a business-friendly environment that supports technological advancements. MyDIGITAL targets to boost the digital economy's contribution to GDP from 15.6% in 2020 to 22.6% by 2025, creating a landscape for SaaS adoption and innovation.

India

Some key initiatives by the Indian government to enable SME digitalisation include:

Digital India Programme Digital India is a flagship initiative aimed at transforming India into a digitally empowered society and knowledge economy. For SMEs, it improves access to high-speed Internet and digital tools, especially in underserved areas, making SaaS adoption more feasible. It also offers digital skill development programmes and simplifies administrative processes through e-governance, enabling SMEs to navigate regulatory systems online with greater ease and efficiency

MSME Digital Transformation Schemes: The Ministry of MSME has rolled out schemes to help small businesses digitise. These include the Udyam registration portal, which streamlines MSME registration and provides access to financial assistance for upgrading digital infrastructure (including SaaS solutions) and to credit schemes that reduce the cost burden of investing in new technologies.

Government-Supported Incubators and Accelerators: Programmes like T-Hub and Startup India Hub provide startups with funding, mentoring, and market access. These incubators create a dedicated environment for digital innovation.

Porter’s 5 forces analysis

Using Porter’s 5 forces analysis, we determine that the cloud-based SaaS HRMS and accounting software market is moderately competitive. Industry rivalry is high due to multiple available vendors but high implementation costs hold back customers from switching between vendors. Government incentives create opportunities for new entrants but they must build credibility given the sensitive nature of data stored by customers.

Financials

We forecast ITL’s revenue and net profit to grow at a CAGR of 9% and 14%, respectively, over FY24-27F

Using Porter’s 5 forces analysis, we determine that the cloud-based SaaS HRMS and accounting software market is moderately competitive. Industry rivalry is high due to multiple available vendors but high implementation costs hold back customers from switching between vendors. Government incentives create opportunities for new entrants but they must build credibility given the sensitive nature of data stored by customers.

Revenue growth driven by expansion into newer markets

Singapore was ITL’s largest revenue contributor in FY24, accounting for approximately 75% of total revenue. Malaysia contributed 19% while Hong Kong and India collectively made up the remaining 6%.

Looking ahead to FY25-27F, we project Singapore to continue as ITL’s core market, contributing roughly c.70% of total revenues p.a. However, we expect revenue growth from Malaysia and India to accelerate, supported by ITL’s planned aggressive marketing investments (Fig 17). These initiatives are likely to drive market share gains in newer markets, in our view. We forecast a three-year (FY24-27F) revenue CAGR of 18% in Malaysia and 29% across other markets.

In terms of product portfolio, we expect HRMS to remain the biggest contributor at c.78% of revenues p.a. in FY25-27F while the share of other products, like InfoTech Accounting Software and Services, gradually increase. We forecast HRMS revenues to grow at 7-11% yoy in FY25-27F. We also assume gradual increases in customer retention rate to 92.5% by FY27F.

Ramping up costs for growth

We forecast ITL’s annual gross margin at 85.4-85.6% in FY25F-27F compared to 85.6-87.0% over FY22-24 as we project higher staff costs and hosting expenses to impact COGS in the near term in order to support ITL’s expansion in Malaysia, India and other new markets.

Employee benefits, which include costs for staff and R&D, formed 64% of ITL’s total expenses (including COGS and operating expenses) in FY24. ITL had 509 employees as at end-FY24, of which 183 were in customer support and 169 in research & development. The remaining employees looked after sales & marketing, finance, HR, administration, technical and other functions. As at end1H25, employee headcount was 560. ITL has been expanding its headcount in India and Malaysia, which typically have lower labour costs compared to Singapore, which we believe will lead to declining staff costs per employee. We expect total staff costs (including R&D) to increase by 5-12% yoy in FY25-27F as ITL continues to hire more employees to support its expansion into its newer markets, such as India, albeit at a lower average cost per employee.

ITL advertises its products through Google Ads and Meta. In our view, as ITL expands its product offerings and enters new markets, it will need additional marketing efforts, such as targeted campaigns and localised advertising, to effectively promote its products, which could limit margin expansion in FY25F.

Strong cash flow generation

As of end-Jun 2025, ITL had no borrowings and was in a net cash position of S$33.7m, which we forecast to grow to S$83m by end-2027F, given its strong cash flow generation capability and limited capex needs. Our forecast includes IPO proceeds of S$23.4m.

ITL operates primarily on a subscription-based model, under which most customers pay upfront for their subscription period (typically 12 months) while ITL’s operating costs are spread out, leading to a strong cash conversion cycle of -198x in FY24. The upfront payments are recorded as contract liabilities, which stood at S$26.8m at end-Jun 2025. We expect this to grow in line with revenues to S$33m by end-FY27F.

ITL incurred S$0.5m/S$1.1m/S$0.4m capex in FY22/FY23/FY24. Given its assetlight model, we do not expect ITL to require significant capex to meet its expansion plans. We forecast capex of S$0.5m p.a. over FY25F-27F.

Dividends

Although ITL does not have a fixed dividend policy, its directors intend to recommend and distribute dividends of c.50% of its net profit after tax (excluding exceptional items) in FY25F and FY26F, as per its IPO prospectus. In 1H25, ITL declared an interim dividend of 1.55 Scts, which represents 48% core payout ratio.

Appendix
Details of its IPO

ITL debuted on the SGX Mainboard on 4 Jul 2025, becoming the first SaaS-based HRMS company to list on the exchange. Its IPO, priced at S$0.87 per share, raised S$23.4m in net proceeds to ITL. As per ITL’s prospectus, it plans to use the IPO proceeds for research and development, enhanced marketing initiatives, and regional expansion across Asia, particularly in Malaysia and India.

ITL’s group structure

As of end-Jun 2025, Info-Tech had six wholly-owned subsidiaries. Info Tech Systems Integrators (M) Sdn. Bhd. and Info Tech Myjobs Sdn. Bhd. are based in Malaysia while Info-Tech Systems Integrators (HK) Limited and Digisme Software Private Limited are based in Hong Kong and India, respectively.

BY THE NUMBERS

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Other Significant Financial Interests:

(i) As of August 11, 2025 CGS International has a proprietary position in the securities (which may include but not be limited to shares, warrants, call warrants and/or any other derivatives) in the following company or companies covered or recommended in this report:

(ii) Analyst Disclosure: As of August 12, 2025, the analyst(s) who prepared this report, and the associate(s), has / have an interest in the securities (which may include but not be limited to shares, warrants, call warrants and/or any other derivatives) in the following company or companies covered or recommended in this report:

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Recipients of this report are to contact CGS SG, 10 Marina Boulevard, Marina Bay Financial Centre Tower 2, #09-01, Singapore 018983 in respect of any matters arising from, or in connection with this report. CGS SG has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only. If you have not been sent this report by CGS SG directly, you may not rely, use or disclose to anyone else this report or its contents.

If the recipient of this research report is not an accredited investor, expert investor or institutional investor, CGS SG accepts legal responsibility for the contents of the report without any disclaimer limiting or otherwise curtailing such legal responsibility. If the recipient is an accredited investor, expert investor or institutional investor, the recipient is deemed to acknowledge that CGS SG is exempt from certain requirements under the FAA and its attendant regulations, and as such, is exempt from complying with the following:

(a) Section 34 of the FAA (obligation to disclose product information);

(b) Section 36 (duty not to make recommendation with respect to any investment product without having a reasonable basis where you may be reasonably expected to rely on the recommendation) of the FAA;

(c) MAS Notice on Information to Clients and Product Information Disclosure [Notice No. FAA-N03];

(d) MAS Notice on Recommendation on Investment Products [Notice No. FAA-N16];

(e) Section 45 (obligation on disclosure of interest in specified products), and

(f) any other laws, regulations, notices, directive, guidelines, circulars and practice notes which are relates to the above, to the extent permitted by applicable laws, as may be amended from time to time, and any other laws, regulations, notices, directive, guidelines, circulars, and practice notes as we may notify you from time to time. In addition, the recipient who is an accredited investor, expert investor or institutional investor acknowledges that as CGS SG is exempt from Section 36 of the FAA, the recipient will also not be able to file a civil claim against CGS SG for any loss or damage arising from the recipient’s reliance on any recommendation made by CGS SG which would otherwise be a right that is available to the recipient under Section 36 of the FAA.

CGS SG, its affiliates and related corporations, their directors, associates, connected parties and/or employees may own or have positions in specified products of the company(ies) covered in this research report or any specified products related thereto and may from time to time add to or dispose of, or may be materially interested in, any such specified products. Further, CGS SG, its affiliates and its related corporations do and seek to do business with the company(ies) covered in this research report and may from time to time act as market maker or have assumed an underwriting commitment in specified products of such company(ies), may sell them to or buy them from customers on a principal basis and may also perform or seek to perform significant investment banking, advisory, underwriting or placement services for or relating to such company(ies) as well as solicit such investment, advisory or other services from any entity mentioned in this report.

CGS SG does not make a market on the securities mentioned in the report.

Chan Swee Liang Carolina, the Group Chief Executive Officer of the CGS International group of companies (in which CGS SG is a member) is an independent non-executive director of City Developments Limited as of 29 Dec 2020. CGS SG is of the view that this does not create any conflict of interest that may affect the ability of the analyst or CGS SG to offer independent and unbiased analyses and recommendations.

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CGS International is not registered with the Spanish Comision Nacional del Mercado de Valores to provide investment services

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Corporate Governance Report (CGR): (Thai CGR and Anti-Corruption of Thai Listed Companies - Click here )

The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information.

The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be changed after that date. CGS TH does not confirm nor certify the accuracy of such survey result.

Score Range: 90 - 100 80 – 89 70 - 79 Below 70 No Survey Result
Description: Excellent Very Good Good N/A N/A

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United Kingdom and European Economic Area (EEA): In the United Kingdom and European Economic Area, this material is also being distributed by CGS International Securities UK Ltd. (“CGS UK”). CGS UK is authorized and regulated by the Financial Conduct Authority and its registered office is at 53 New Broad Street, London EC2M 1JJ. The material distributed by CGS UK has been prepared in accordance with CGS International’s policies for managing conflicts of interest arising as a result of publication and distribution of this material. This material is for distribution only to, and is solely directed at, selected persons on the basis that those persons: (a) are eligible counterparties and professional clients of CGS UK; (b) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”), (c) fall within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Order; (d) are outside the United Kingdom subject to relevant regulation in each jurisdiction, material(all such persons together being referred to as “relevant persons”). This material is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this material relates is available only to relevant persons and will be engaged in only with relevant persons. This material is categorised as non-independent for the purposes of CGS UK and therefore does not provide an impartial or objective assessment of the subject matter and does not constitute independent research. Consequently, this material has not been prepared in accordance with legal requirements designed to promote the independence of research and will not be subject to any prohibition on dealing ahead of the dissemination of research. Therefore, this material is considered a marketing communication.

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CGS US has not managed or co-managed a public offering of any of the securities mentioned in the past 12 months.

CGS US has not received compensation for investment banking services from any of the company mentioned in the past 12 months.

CGS US neither expects to receive nor intends to seek compensation for investment banking services from any of the company mentioned within the next 3 months.

United States Third-Party Disclaimer: If this report is distributed in the United States of America by Raymond James & Associates, Inc (“RJA”), this report is third-party research prepared for and distributed in the United States of America by RJA pursuant to an arrangement between RJA and CGS International Securities Pte. Ltd. (“CGSI”). CGSI is not an affiliate of RJA. This report is distributed solely to persons who qualify as “U.S. Institutional Investors” or as “Major U.S. Institutional Investors” as defined in Rule 15a-6 under the Securities and Exchange Act of 1934, as amended. This communication is only for U.S. Institutional Investors or Major U.S. Institutional Investor whose ordinary business activities involve investing in shares, bonds, and associated securities and/or derivative securities and who have professional experience in such investments. Any person who is not a U.S. Institutional Investor or Major U.S. Institutional Investor must not rely on this communication. The delivery of this report to any person in the U.S. is not a recommendation to effect any transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. If you are receiving this report in the U.S from RJA, a FINRA/SIPC member, it takes responsibility for the content of this report. For further information or to place an order in any of the above-mentioned securities please contact a registered representative of CGS US or RJA. https://raymondjames.com/InternationalEquityDisclosures

Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

Distribution of stock ratings and investment banking clients for quarter ended on 30 June 2025
561 companies under coverage for quarter ended on 30 June 2025
Rating Distribution (%) Investment Banking clients (%)
Add 70.6% 1.1%
Hold 20.5% 0.5%
Reduce 8.9% 0.5%

The MSCI sourced information is the exclusive property of MSCI Inc. (MSCI). Without prior written permission of MSCI, this information and any other MSCI intellectual property may not be reproduced, redisseminated or used to create any financial products, including any indices. This information is provided on an “as is” basis. The user assumes the entire risk of any use made of this information. MSCI, its affiliates and any third party involved in, or related to, computing or compiling the information hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of this information. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind. MSCI and the MSCI indexes are services marks of MSCI and its affiliates.