Equity Analysis /

I&I Group PCL: 3Ms to drive growth—market, momentum, and margins

  • Strong market demand

  • PDPA—another growth driver in 2022

  • Momentum to be sustained into 2022

Napon Jaisan
Napon Jaisan

Equity Research Analyst

Bualuang Securities
2 December 2021

The stock price continues to trend higher, supported by robust corporate IT budget growth (a key area of focus among growth-minded investors). IIG remains one of our favorite software plays heading into 2022, as we expect sustained revenue growth (strong market demand) and fatter margins to accelerate profit expansion. Our YE22 target price upsizes from Bt46 to Bt50. BUY!

Strong market demand

Despite (or maybe supported by) the advent of COVID-19, IIG reported strong revenue growth—39% for 2020 and we expect 23% for 2021 and 33% for 2022. What gives us confidence? Firstly, the firm’s core operations squarely address most of the priorities identified in Morgan Stanley’s 3Q21 CIO Survey—cloud computing (#1), digital transform-ation (#2), CRM (#6) and ERP (#8)—in a climate of heavy software spending. Note that marketing/CRM and customer service ranked highest among the top three CIO priorities for digital transformation. Secondly, our channel checks suggest a big backlog and plenty of deals in the pipeline. Closing these deals combined with a rising base of recurring revenue will support strong organic growth through 2022.