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Company Update

Info-Tech Systems Ltd

Singapore | Information Technology

Growth runway intact

Rating : BUY (as at 12 August 2026)
Last Close : SGD 0.970
Fair Value : SGD 1.35
  • 1H26 adjusted PATMI of SGD8.7m (+20.7% year-on-year (YoY)) came in ahead of our estimates, primarily due to lower-than-expected effective tax rate.
  • Academy and Malaysia Subscriptions were key revenue growth bright spots. Singapore subscriptions continued sequential growth in 1H26 after troughing in 1H25. Retention rate was healthy at >90%.
  • Increase fair value (FV) estimate from SGD1.30 to SGD1.35 on unchanged 16x FY27E price-to-earnings (P/E) multiple. Info-Tech Systems (ITL) currently trades at an attractive 11.4x FY27E P/E. BUY.

Investment thesis

We see ITL as a beneficiary of artificial intelligence (AI) rather than being negatively impacted by it. ITL’s core subscription business is anchored in small and medium enterprises (SMEs) across Singapore, Malaysia, Hong Kong and India, with attractive runway where affordability, local compliance know-how and deep integration into human resource (HR), payroll and workflow processes make switching relatively difficult. At the same time, Academy gives ITL a direct route to monetise AI-readiness demand through individual and corporate training programmes. Backed by a capital-light model and robust free cash flow, we view ITL as an attractive dividend compounder.

Investment summary

  • 1H26 beat on lower-than-expected tax rate – Adjusted PATMI of SGD8.7m (+20.7% YoY) was slightly ahead of our estimates and in line with consensus. The beat against our expectations was because the 20% corporate income tax (CIT) rebate following its IPO is now successfully in effect. Strong operating expense (OPEX) control was also a partial driver of the beat.
  • Broad-based revenue growth; bright spots in Academy and Malaysia – Revenue grew 21.7% YoY to SGD27.3m, with key drivers being (i) Singapore Services (SGD4.7m, +120.7% YoY), driven by
Lai Gene Lih, CFA
Equity Research

Security information

Ticker ITSL SP EQUITY
Market Cap (SGD b) 0.25
Daily turnover (SGD m) 0.94
Free Float 35.6%
Shares Outstanding (m) 258
Top Shareholder Dilip Babu Setin Sub 41.42%

strong Academy performance, and (ii) Malaysia Subscriptions (SGD5.6m, +26.7% YoY) on continued strong momentum.

  • Refocusing of efforts on Singapore Subscriptions bearing fruit –Singapore subscriptions bottomed in 1H25 and have grown sequentially since then to SGD13.9m (+6.1% YoY, +2.1% half-on-half (HoH)). We believe this is favourable evidence of (i) management’s refocusing towards the largest revenue category of the company, (ii) that Singapore is not an ex-growth market; and (iii) ITL is not being negatively impacted by AI. Subscription customers remained sticky, as 1H26 retention rate was healthy and “above 90%” (FY25: 90%). Taken together, we see these as proof points that ITL’s value proposition to SMEs is intact.
  • Broadening focus on corporate signups for Academy – ITL reemphasised that it is broadening its focus beyond individuals to include corporate training. ITL is leveraging general excitement on AI-readiness, as more than 85% of Academy revenue was from AI-related programmes. Academy was seasonally softer in 1H26, and we expect momentum to pick up in 2H26. However, we see risks that Singapore Services (where Academy is parked under) may experience YoY contraction in 2H26 due to high base effects in 2H25.
  • Redesignation of Chairman – With effect from 1 Jan 2027, Mr. Peter Lee will transition from Executive Chairman to Non-Executive Chairman as part of succession planning. We are neutral to this transition, as (i) present management bench strength is strong and stable; (ii) Mr. Lee will still provide strategic guidance and mentorship; and (iii) the Malaysia platform – which he spearheaded – is already running on strong momentum from on-the-ground workforce.
  • Valuation undemanding – With the change in analyst coverage, we raise our FY26-28E earnings per share (EPS) projections by 6-9%, primarily due to a lower CIT rate input and adjustments to our OPEX assumptions. Consequently, our FV estimate rises to SGD1.35 (previously SGD1.30) on unchanged 16x FY27E P/E multiple. ITL trades at an attractive FY26E free-cash-flow yield of 8.3%. Reiterate BUY.

Potential catalysts

  • Acceleration of growth in Singapore Subscriptions, particularly human resource management software (HRMS), evidencing that Singapore remains a market with attractive runway
  • Expansion of solutions suite in line with customers’ needs, spurring new customer wins or improving customer stickiness
  • Return of excess cash / free cash flow via higher dividends / dividend payout ratio

Investment risks

  • Slower than expected growth in Malaysia Subscriptions and Academy
  • Failure to retain existing customers due to inability to respond to changing customer preferences or deteriorating macroeconomic conditions
  • Data security and/or cloud computing infrastructure downtime could impact operations and result in regulatory fines

Company financials

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