KUALA LUMPUR (Sept 2): Rakuten Trade has rated SNS Network Technology Bhd a “buy” at 26 sen with a target price of 36 sen and said coupled with rising demand for ICT solutions due to workplace digitalisation, it expects SNS Network to register net earnings of RM31.8 million for FY23 and RM38.8 million for FY24.

In an investment idea note on Friday (Sept 2), Rakuten said the target price of 36 sen was premised on 15 times price-earnings ratio (PER), 50% discount to its listed peer on Bursa Malaysia due to smaller market capitalisation.

The research house said SNS Network’s commercial channel, which contributed 72.7% to total revenue in FY22, will continue to be the main growth driver.

It said with the new era of subscription-based IT service, device-as-a-service (DaaS), SNS Network will be able to recognise recurring income for five years per subscription.

It said as of April 2022, SNS Network has enrolled 77 DaaS subscriptions worth RM235.55 million.

Telekom Malaysia Bhd was one of the major clients with 45.1% revenue contribution and this strong collaboration was built over the past 19 years.

“SNS has been appointed as Apple Authorised Service Provider since 2014, marketed as 'iTworld'. SNS’s physical store channel comprises 56 brand-specialty stores and seven multi-brand concept stores across Malaysia,” it said.