Systec – has the market given up on its growth?

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Over the past 5 years, Systech shifted from being primarily a provider of software and e-business solutions to focusing on AI, IoT, digital transformation, and cybersecurity. It divested its loss making e-business solutions and acquired capabilities in digital transformation and AI

These strategic changes reflect an adaptation to evolving market demands and a drive toward long-term growth. These acquisitions, together with its focus on high-growth areas like IoT, and cybersecurity and operational efficiencies, has help to drive revenue growth in recent quarters as can be seen in the chart.



The strange thing is that the market price has come down since Sep 2023 shown below. Is the market suggesting that these growths cannot be sustained since Systec falls into the high-investment risk, poor business fundamental quadrant on the Fundament Mapper?

Apart from continue revenue and earnings growth, look out for the following in the next few quarters to asses that growth is sustainable

• A diversified customer base

• Product innovation

• Organic growth

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Systech’s Big Bet on AI & Cybersecurity: Turnaround Story or Just Another Tech Mirage?

Systech started out as a niche provider of e-Business solutions, developing software platforms for direct selling and membership-based industries. Over time, it expanded into CyberSecurity, building capabilities in monitoring and protecting digital assets.

Facing persistent losses in its legacy MLM software business, Systech eventually exited this segment and repositioned itself by acquiring new ventures like Wilstech and TalentCloud AI.

Today, it stands as a digital transformation and cybersecurity group, offering solutions across AI, IoT, ERP, and information security. While its customer base spans Malaysia, Singapore, and parts of Asia, its revenues remain largely project-driven, reflecting both growth opportunity and concentration risk.

Its financial performance reflects this changing business profile. Over the past six years, while revenue roughly doubled, operating income fell from RM2.5 million in 2019 to an operating loss of RM2.7 million in 2024.

At this point, Systech is still in a transition phase, with no clear signs of operating stability. Revenues remain project-based, gross profit margins have been shrinking, and there is no evident margin recovery. The equity base has also eroded materially.

While the business has been strategically repositioned, the next 1-2 years will be crucial to determine whether its ventures with Wilstech and TalentCloud AI can evolve into a genuine financial turnaround, delivering positive margins and more stable earnings.

Given this picture, it is no surprise to find Systech currently placed in the Quicksand quadrant of the Fundamental Mapper.