• Initiate coverage with BUY and SGD1.40 TP, 39% upside, c.5% yield.We believe Info-Tech Systems is well positioned to capitalise on the policy-driven shift for SMEs to digitalise core functions, given ITSL’s local native and SMEcentric platforms, on top of the huge, yet underserved software as a service (SaaS) SME market. Our valuation represents a 15% discount to regional peers, and we forecast a 3-year core earnings CAGR of 12.3%.
• Proven growth track record.ITSL’s key strength lies in its ability to build and maintain a locally compliant, integrated payroll engine across four markets (Singapore, Malaysia, Hong Kong, and India), which represents a significant barrier to entry. While the addressable market in these countries is expected to grow from USD3.69bn in 2025 to USD4.65bn in 2028 (8.0% CAGR), ITSL is forecasted to outperform, delivering a higher revenue CAGR of 10.5% – driven by its scalable platform architecture and attractive pricing.
• SME-centric platform with affordable pricing.ITSL has purpose-built its software to cater to the needs of SMEs, viewing pain points that SMEs face, ie lean human resource (HR) team, limited budgets, and regulatory compliance, as opportunities to serve. Affordability is another ITSL key competitive strength, directly addressing SMEs’ primary concern regarding cost. ITSL offers competitive pricing, particularly for subscription renewal. While not the cheapest option, we view ITSL’s pricing as highly attractive given the breadth of its HR Management System (HRMS) and payroll suite.
• Favourable policy support.A highly supportive policy environment in Singapore has significantly lowered adoption barriers for SMEs and accelerated HRMS uptake – directly benefiting SaaS HRMS providers, ie ITSL. Beyond Singapore, frequent regulatory changes across the group’s operating markets create a recurring compliance burden that encourages SMEs to adopt continuously updated SaaS platforms. We believe ITSL is well positioned to capture sustained growth given its localisation expertise, compliance‑first platform, and established regional presence.
• We forecast a core profit CAGR (FY25-28) of 12.3%,backed by growing user base for its existing HRMS and accounting software in both domestic and foreign markets. Given its asset-light business, we expect ITSL to command higher core profit margins of 32.4%, 32.7%, and 33.4% in FY26-28F, from 31.9% in FY25.
• Our TP is pegged to 15.5x FY27F P/E,which is at a 15% discount to the global peer average, due to its relatively small size. Our TP includes a 0% ESG premium/discount.
• Key risks includedependence on government grants for market penetration, SME-specific vulnerabilities, and intense competition caused by low barriers of entry.

Asia

Singapore

Technology

Info-Tech Systems

ITSL SP

Buy

Valuation basis

15.5x FY27F P/E

Key drivers

i. Higher penetration rate in the SME market;

ii. New complementing products and market expansion;

iii. Government grants and incentives for digitalisation and upskilling.

Key risks

i. Dependence on government grants for market penetration;

ii. SME-specific vulnerabilities;

iii. Intense competition due to low barriers of entry.

Company Profile

Info-Tech Systems (ITSL) is a technology company principally involved in providing software-as-a-service (SaaS) solutions such as Human Resource Management System (HRMS), accounting software and Customer Relationship Management (CRM) software. ITSL also provides training courses for upskilling and payroll outsourcing services.

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Source: Company data, RHB

Investment Thesis

Leading player in the underserved market, with a proven growth record

Since its inception, ITSL has demonstrated a superb growth track record with its total user base expanding at a CAGR of 18% for the last three years, while revenue CAGR expanded 22% in the same period. Besides Singapore, the group has expanded its footprint into Malaysia, Hong Kong, and India. In each market, its platform is tailored to best meet the local demands, ie local language options, statutory compliance obligations, and local operational norms. We believe this represents a meaningful barrier to entry, as replicating such platform infrastructure would require years of development and regulatory expertise.

Based on Converging Knowledge data, the SaaS cloud-based SME HRMS and accounting software market size of the countries which ITSL currently operates in is estimated to increase from USD3.69bn in 2025 to USD4.65bn in 2028, representing a CAGR of 8.0%. Over the same period, we forecast ITSL will generate revenue at a higher CAGR of 10.5%, which is possible due to ITSL’s own platform architecture as well as attractive pricing.

• The market size across ITSL’s operating countries is expected to exceed USD4.6bn by 2028 (8.0% CAGR), while ITSL is forecasted to outgrow the market with a 10.5% revenue CAGR, supported by its platform architecture and competitive pricing.

SME-centric, modular platform driving high retention

SMEs are the dominant form of business organisations globally, including in ITSL's core markets. According to the World Economic Forum, SMEs are estimated to encompass c.90% of all companies, 70% of total employment, and contribute up to 70% of global GDP. Despite the grand scale, SMEs have historically been underserved by enterprise HR software vendors. Established vendors, ie SAP, Oracle, Workday and ADP, typically offer platforms built for large organisations with more complex organisational structures, and have pricing structures that tend to be less accessible to smaller businesses.

According to Mordor Intelligence, Asia-Pacific human capital management software (HCMS) market in 2025 was valued at USD8.9bn, with large enterprises accounting for 63.9% of the revenue while SMEs, though the fastest-growing adopter segment, have historically been underserved. Although SMEs are the fastest‑growing adopter group, their market remain under-penetrated, creating a gap for SME‑native platforms such as ITSL.

Affordable product offerings

We believe one of ITSL’s key selling points is the affordability of its software, which directly addresses SMEs’ key concern – cost. SMEs tend to be highly cost‑conscious due to their smaller scale and ongoing operating cost pressures. As mentioned earlier, enterprise SaaS providers such as SAP, Oracle, Workday and ADP are typically designed for larger and more complex organisations, and often entail significant implementation and customisation costs. Industry estimates suggest that adoption costs for mid‑market organisations can run into hundreds of thousands of USD, while large enterprise deployments can amount to several millions of USD. This pricing and cost structure created a gap in the market for comprehensive yet affordable HRMS solutions, which ITSL is well positioned to address.

For the first year of subscription, ITSL is most price-competitive at the micro-SME level, offering HRMS software at 7-19% lower than its peers. However, packages for larger headcounts are more expensive relative to peers, as ITSL offers more comprehensive professional services for bigger organisations to ensure seamless data migration and software setup. However, it stands out as one of the more value-for-money options among local HRMS providers when it comes to subscription renewals. Based on our analysis, ITSL’s monthly subscription fee from the second year onwards is approximately SGD4 per employee, which is c.21% lower than the average pricing of local peers. While it is not the cheapest solution in the market, we view this pricing as highly competitive given the breadth of its full HRMS and payroll suite.

Customer experience as a driver of long-term value creation

Beyond SME-friendly software and affordable pricing, ITSL’s success is underpinned by strong operational execution that prioritises customer experience and support. While purpose-built software offerings and competitive pricing can be effective in attracting new customers, these factors alone are insufficient to ensure customer retention amid intense competition and the abundance of similar software solutions in the market.

Successful adoption and sustained usage of SaaS platforms also depend on the ongoing support offered by the vendors. Hence, ITSL maintains a policy of assigning dedicated support staff members to each customer. This provides familiarity for both the customer and support personnel, which facilitates faster and more effective resolution of issues. The support function also operates closely with the software development team by channelling customer insights into product enhancements and new feature development, hence creating a continuous feedback loop.

ITSL has also consistently invested in R&D to enhance its solution offering, with annual R&D expenditure of SGD3-4m, making up c.7-9% of revenue. These investments support the software development team in incorporating feedback provided by the customer support function. This enables continuous development of new modules and solutions, enhancements, and upgrades of existing software, and timely bug fixes. This approach ensures ITSL’s products and solutions are closely aligned with customer expectations and the requirements of HR and accounting stakeholders. To support successful adoption of products in new markets, the software development team also prioritises localising its existing offerings for customers in their respective markets.

• ITSL has also consistently invested in R&D to enhance its solution offering, with annual R&D expenditure of SGD3-4m, making up c.7-9% of revenue.

ITSL also adopts a policy of responding to customers within four hours to ensure inquiries and issues are addressed and resolved promptly. This contrasts with its competitors, with most vendors relying on chatbots and standardised support channels to provide response times ranging from 24 hours to several working days. Shorter resolution time not only improves customer satisfaction but also signals excellent operational execution and commitment to client success – an important factor in competitive markets.

• ITSL also adopts a policy of responding to customers within four hours to ensure that customer inquiries and issues are addressed and resolved promptly.

To further enhance customer stickiness, ITSL focuses on addressing gaps within the SME SaaS market beyond HRMS. This is evidenced by its expansion of offerings, which include accounting software since 2022, introduction of customer relationship management (CRM) software in 2026 as well as provision of training courses approved by Singapore Workforce Skills Qualifications (WSQ), ie its Infotech Academy training. While HRMS subscription revenue still makes up the lion’s share of revenue, its share has reduced over the years as the non-HRMS subscription revenue, especially academy training and accounting software, has risen significantly in recent years.

• To further enhance customer stickiness, ITSL focuses on addressing gaps within the SME SaaS market beyond HRMS.

Favourable industry tailwinds and policy support

ITSL benefits from multiple long‑term industry trends that drive demand for cloud‑based HR systems, creating strong and sustained growth for its solutions. Multiple global studies show continued, broad-based adoption of SaaS and cloud‑based enterprise software, particularly for core functions like HR, payroll, finance, and collaboration. While overall SaaS spending growth has moderated since the 2021-2022 boom, the migration away from on‑premise systems is still ongoing, especially in HR and payroll where cloud solutions are now the default for new deployments. According to IT think-tank Capgemini Research Institute, 77% of executives view cloud scalability and performance as critical to business growth, with the share of on‑demand technologies in IT budgets expected to rise materially.

,p>In Singapore, the policy environment is supportive and actively designed to drive SME adoption of the very solutions ITSL offers. Singapore’s digital economy expanded SGD12bn in 2024 to reach SGD128.1bn, representing 18.6% of national GDP (from 14.9% in 2019). This growth is driven by not just the technology sector, but also through digitalisation across nontechnology industries, highlighting the broad-based expectation for businesses of all types to adopt digital tools. Transition to digitalisation has been made easier for SMEs in Singapore, thanks to various initiatives implemented by the Government to reduce the burden of such switch. One of the initiatives is the Productivity Solutions Grant (PSG), which provides funding support for SMEs to adopt pre‑approved IT solutions, including HRMS. The grant lowers upfront adoption costs and shortens payback periods, hence encouraging SMEs to digitalise core business functions. As a result, PSG has played a key role in accelerating HRMS adoption among SMEs, supporting sustained user base growth for PSG-approved HRMS providers like ITSL.

Government-led policies in digitalisation go beyond IT systems and work processes, as they also encourage employees to upskill and be future-ready with evolving technologies. For example, SkillsFuture Credit alleviates the burden of upskilling, by partly subsidising fees of approved courses. Singapore citizens aged 25 and above were given an opening credit of SGD500, plus a top-up of another SGD500 back in 2020. The top-up, which expired end-2025, resulted in ITSL recording higher registrations for its learning courses in FY25, with c.15k registrations recorded. A similar scheme at enterprise level is also offered by the Government, eg SkillsFuture Enterprise Credit (SFEC), where a one-off SGD10k is provided to Singapore-registered businesses to encourage enterprise and workforce transformation. This allows the enterprises to offset up to 90% of their out-of-pocket expenses related to upskilling employees. Given that SFEC is expected to expire in Nov 2026, we forecast ITSL to see high course registrations in FY26 and expect a 26% jump in services revenue. Post expiry, the SFEC will be redesigned from the “reimbursable” to an “online wallet” model, with another SGD10k credited into the wallet and can be utilised within three years for eligible enterprises. After a big 184% jump in FY25 revenue and another 26% increase expected in FY26, we impute a conservative revenue growth assumption of 8% in FY27 and FY28.

Operating costs and core profit margins expectation. Overall, we expect revenue to grow at a 3-year CAGR of 10.5%, with foreign markets contributing a higher CAGR of 13.1% vs Singapore’s 9.7%. As the share of lower-margin non-Singapore revenue rises, we expect a slight gross margins compression over the forecast period, from 85.2% in FY25 to 84.9% (FY26), 84.5% (FY27), and 84.1% (FY28). However, given its asset-light business model and operating leverage, we expect core profit margins to expand 32.4%, 32.7%, and 33.4% in FY26-28 from 31.9% in FY25 as revenue outpaces operating cost increases. In line with ITSL’s policy of having dedicated support teams for each customer, we forecast that the increase in operating costs will largely be driven by increasing staff costs, at a 3-year CAGR of 9.2%. Overall, we expect the group’s earnings to grow 17.8% YoY in FY26F, moderating to 10% and 9.1% in FY27 and F28. The deceleration is mainly due to the high base effect, as ITSL has delivered a 3-year earnings CAGR of 35%.

Healthy balance sheet. ITSL is in a net cash position, with SGD67.3m worth of cash sitting on its balance sheet with zero debt. This strong cash position is made possible due to its upfront subscription business model, where customers pay for the software subscription for 12 months upfront. This virtually eliminates its need for short-term borrowings to finance its working capital.

Dividend. ITSL does not have a fixed dividend policy. However, the group previously mentioned that it intends to pay at least 50% of net profit after tax for FY25 and FY26. Note: In FY25, ITSL paid a total DPS of 3.5 SG cents. This marks its first dividend payment after its listing in 2025, which translates to a core payout of 50.2%. We forecast a fixed payout ratio of 50% over the forecast horizon.

Our forecasts vs consensus. Our earnings forecasts are 7-11% higher than consensus, signalling our more bullish view on ITSL. We believe the difference is mainly due to less optimism by Street on the margins and the group’s operating leverage. We believe ITSL can deliver our forecasted earnings CAGR of 12.3%, considering its FY25 core earnings delivery of SGD18m, which beats consensus’ estimates of SGD14m by 28%.

Valuation

Initiate coverage with a BUY and TP of SGD1.40, represents a c.39% upside. We favour ITSL for its asset-light business with solid execution track record in expanding its business beyond Singapore, healthy balance sheet and core profit CAGR of 12% over the forecast horizon. Our TP is based on target PE of 15.5x applied to FY27F core profit of SGD23.4m. The target multiple represents a 15% discount to the global peers’ average of 18.3x, which we believe is justifiable, taking into account ITSL’s smaller size and relatively lower ROE. However, comparing this counter to its regional peers, the group has higher earnings growth prospects and better ROE, which we believe is likely due to its capital-efficient business model.

Company Overview

ITSL is a Singapore-headquartered technology company incorporated on 27 Jun 2007 and listed on the Singapore Exchange in Jul 2025. The group was co-founded by Executive Chairman Peter Lee Kim Heng and CEO Setin Subramanian Dilip Babu, both of whom have extensive experience in the software solutions industry of over 25 years. ISTL is a SaaS solutions provider that sells cloud-based business software primarily to SMEs. Its key products are a HRMS platform, accounting software, and the recently launched CRM software. ITSL also provides training courses and payroll outsourcing services. The group currently operates across four offices in Singapore, Malaysia, Hong Kong, and India, supported by a workforce of more than 500 employees. Its HRMS platform serves over 25,000 organisations spanning various industries and has more than 970,000 active users.

ITSL’s revenue can be categorised in three segments:

i. Subscription – mainly HRMS and accounting software;

ii. Services – academy training, payroll outsourcing services, and other ancillary service revenues;

iii. Hardware – sales of hardware products such as closed-circuit television, access control device, face recognition, and fingerprint reader to customers.

HRMS

ITSL’s largest and core business product under its subscription segment is its cloud-based SaaS HRMS, which accounted for 66% of total group revenue in FY25, generating SGD37.1m. This HRMS is a fully proprietary platform developed in-house by the group’s internal software development team, covering nine modules: HR software, time attendance, payroll, leave management, claims management, e-scheduling software, performance appraisal, project costing, and applicant tracking system.

Designed specifically for SMEs, it is deployed via a cloud infrastructure that enables scalable, cost-effective, and flexible delivery. Customers typically enter into 12-month contracts and are billed annually in advance, with subscription fees determined by the number of modules adopted as well as the size of the customer's workforce.

Accounting software

The group's second key offering is Info-Tech Accounting Software, a cloud-based SaaS accounting solution launched in 2022 to complement its core HRMS offering. The segment accounted for 4.0% of total group revenue in FY25 at SGD2.0m, though it is the fastestgrowing segment, having grown at a 3-year CAGR of 178%. Unlike the HRMS platform, this accounting software is not modular in nature and is priced at a fixed subscription fee, regardless of the number of employees, making it straightforward to adopt. The software covers a full suite of core accounting functions which include bank reconciliation, inventory management, invoicing, accounts receivable and payable, GST/sales & service tax or SST compliance and financial reporting. It is also seamlessly integrated with ITSL's HRMS platform. As of end FY25, the software is used by c.1,700 organisations.

CRM software

The group's newest offering is CRM, which was launched in Feb 2026. This software offers various features such as end-to-end sales workflow, integrated digital advertising and communications, payment gateways, and integration with ITSL’s HRMS software. Management expects this product to meaningfully contribute to the group’s revenue starting 2H26.

Academy training

ITSL's biggest offering under its services segment is its academy training, which offers training courses under Singapore's Workforce Skills Qualifications (WSQ) framework. WSQ is a national credential system administered by SkillsFuture Singapore that trains, assesses, and certifies workforce skills and competencies. It is a continuing education and training framework designed to promote lifelong learning and workforce development, and is accessible to all workers without academic prerequisites. Upon completion of each WSQ module, learners are awarded a Statement of Attainment, a nationally recognised certification. Courses are funded and quality-assured by SkillsFuture Singapore, which means learners can tap on government subsidies to offset course fees, making it an accessible and cost-effective training pathway. Note: This offering is only available in Singapore for now.

Payroll outsourcing

As part of its services revenue, ITSL also offers a suite of payroll-related services – from calculating employee salary to filing tax returns – allowing organisations to focus on their core operations. This segment intends to attract businesses who outsource their payroll processes to eventually take up the group’s HRMS and payroll module if such firms decide to bring payroll operations in-house.

Hardware

Hardware revenue relates to direct sales of hardware products, such as closed-circuit television, access control devices, and face recognition and fingerprint readers to customers. This segment is incidental to ITSL’s SaaS offerings, mainly HRMS.

Key Management

Peter Lee Kim Heng, Executive Chairman. As co-founder and executive chairman of ITSL since Feb 2020, Lee is responsible for providing strategic leadership, overseeing executive management, ensuring financial stewardship, driving product development initiatives, and fostering strong relationships with key stakeholders. His career began as a product manager at Dicklin Corp from 1986 to 1993 before serving as sales & marketing manager at Time Access International from 1994 to 1995. Between 1996 and 2007, he was actively involved in developing and selling Microsoft Windows-based HR solutions, laying the groundwork for what would eventually become ITSL. He holds a Diploma in Sales & Marketing from the Marketing Institute of Singapore.

Setin Subramanian Dilip Babu, Executive Director and CEO. As co-founder and CEO of ITSL since 2007, Setin oversees the group's core business functions, including profit & loss management, marketing strategy, and the innovation and expansion of new products. Under his leadership, ITSL successfully transitioned from a Windows-based system to a cloud-based architecture, launching its flagship cloud-based HRMS in 2016. Setin has also spearheaded the group's geographic expansion into Malaysia, Hong Kong, and India, while introducing complementary offerings such as the Info-Tech Accounting Software and the Jobs Lah recruitment portal. Prior to co-founding ITSL, he held roles at Nivetha Software Services & Consultants, EPS Computer Systems, and Info-Tech Systems International from 1996 to 2006. Setin holds a Bachelor of Engineering (Agriculture) from Tamil Nadu Agricultural University.

Yeoh Sin Yee, Executive Director and Chief Operating Officer. Yeoh has served as chief operating officer since Feb 2020, overseeing cross-functional teams spanning marketing, sales, support, and product development. Her journey with ITSL began in Jan 2003 when she joined as an administrative executive, before steadily rising through the ranks to office manager in 2004 and general manager in 2007. In her current role, Yeoh is responsible for driving ITSL’s internal growth and operational excellence, ensuring alignment and cohesion across the organisation. She holds a professional diploma in Accounting and Business Finance from the Kaplan Higher Education Institute.

Dinesh Kamal Somanchi, Chief Technology Officer. Dinesh joined ITSL in Jun 2015 as a software programmer and has since risen to his current role as CTO, which he has held since Feb 2020. Dinesh is responsible for defining the group's products strategy, overseeing technological innovation, and managing the enhancement and support of ITSL's full suite of solutions. He played a pivotal role in the group's transition from on-premise HR systems to a cloud-based SaaS model. Prior to joining ITSL, Dinesh served as associate development manager at Tenxlabs Technologies in India from 2010 to 2015. He holds a Master of Science in Enterprise Systems from Sheffield Hallam University and Bachelor of Technology in Computer Science and Engineering from Jawaharlal Nehru Technological University, Hyderabad.

Chow Yee Juan, Chief Financial Officer. Chow joined ITSL in Feb 2026, bringing over 35 years of experience in finance and corporate leadership. He oversees the group's finance, treasury, compliance, and investor relations functions, ensuring disciplined financial management and strong governance standards. Chow works closely with the executive leadership team to align financial strategy with ITSL's long-term growth ambitions, with a focus on disciplined capital allocation, strengthening governance and compliance frameworks, and enhancing transparency in reporting to shareholders and stakeholders. He holds a Master of Business Administration and professional accounting qualifications.

Key Risks

SME customer concentration and PSG dependency. Approximately 90% of ITSL’s customers in Singapore are SMEs, and roughly 66% of new SME customers for its HRMS and accounting software in FY24 were recipients of the Government's PSG, which subsidises up to 50% of first-year adoption costs. The PSG is only available to each customer in the first year of their subscription and is not applicable upon renewal, creating a structural question mark over retention rates among cost-sensitive SMEs who signed up primarily because of the grant subsidy. On top of that, the PSG is renewed on an annual basis at vendor level, meaning ITSL must maintain its approved vendor status each year across its HRMS and accounting software products. While the group does not foresee difficulty in renewing, any failure to do so, or a policy-level reduction or discontinuation of the PSG scheme by Enterprise Singapore, would remove a critical demand catalyst that currently underpins the majority of new customer acquisitions in Singapore.

Technology and cybersecurity risk. ITSL's entire SaaS delivery model is dependent on Microsoft Azure, which hosts all customer data and powers the cloud infrastructure for both the group’s HRMS platform and accounting software. ITSL does not disclose a secondary cloud provider arrangement, meaning a prolonged Azure outage, a unilateral change in Azure's commercial terms, or a cybersecurity breach at the data centre level would simultaneously impair services delivery for the entire customer base with limited ability to switch or restore on an alternative platform in the near term. Beyond infrastructure risk, the group's platforms are also exposed to threats that include malware, ransomware, and cyberattacks. Hence, reputational damage from a material service disruption could accelerate customer churn and deter new acquisitions in a market where trust in data security is a key consideration.

Geographic concentration in Singapore and Malaysia. Revenue from Singapore and Malaysia accounted for c.94% of total group revenue in FY25, a proportion that has remained largely unchanged over the past three years. While ITSL has operations in Hong Kong and India, and recently incorporated a subsidiary in Dubai, these markets collectively represent a small fraction of current earnings. This concentration means that any adverse macroeconomic conditions or regulatory changes specific to Singapore or Malaysia – eg changes to the regulatory framework governing payroll compliance or the removal of SME support schemes – would have a direct impact on group revenue, with limited offset from other geographies.

Rising employee costs and labour law changes. Staff costs are the single largest expense line for ITSL, consistently representing c.40-43% of total revenue across FY22-FY25. The group’s headcount grew 61% between FY22 and FY24, and the business model requires continued investment in sales staff, software developers, and customer support personnel to sustain growth. While the support hub model, which concentrates certain operational roles in lowercost geographies such as India and Malaysia, the core sales force and management team are predominantly based in Singapore, where wage inflation and competition for skilled technology talent remain persistent. Hence, any mandatory increase in minimum wages or broader labour law reforms across Singapore and Malaysia could further compress operating margins.

SME customer vulnerability to business closure or budget cuts. The underlying vulnerability of the SME customer base itself represents a standalone risk. SMEs, by their nature, operate with larger financial constraints than large enterprises and are disproportionately exposed to economic cycles, credit conditions, and sector-specific downturns. In a recessionary environment, or a period of sustained cost pressure, ITSL’s clients may downgrade their software subscriptions, reduce the number of modules adopted, or opt not to renew entirely.

FX. ITSL reports in SGD, but generates a portion of its revenue through subsidiaries whose functional currencies are MYR, HKD, and INR. Malaysia, the largest foreign market, contributed c.18% of FY25 revenue, with Hong Kong and India together adding a further 6%. Currency movements affect both the translation of subsidiary earnings into SGD for consolidation. A sustained depreciation of these foreign currencies against SGD would reduce the SGD value of foreign-sourced revenues and profits.

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