We believe IIG is in the early adoption stage. Therefore, there is still plenty of room for growth. It should beat the curve of any possible global economic recession. Its current valuation is very cheap compared with peers, or even Lansing’s cost. BUY!
Demand isn’t an issue
As of end-Sep 2022, IIG reported annual recurring revenue of Bt477m, a backlog of Bt400m, and aggregate project value of Bt640m in its pipeline (average conversion rate of 50%). The firm targets revenue of Bt950m in 2022, Bt1.4bn in 2023 (in line with our assumption) and Bt2bn in 2024 (14% above our assumption). Given its strong backlog and recurring revenue on hand, we expect IIG’s 2023 revenue target (excluding Lansing) is already secured at 90-95%. Note that, IIG will start consolidation of Lansing in 1Q23. As for profitability, NM is expected at more than 12% in 2023 vs. our current assumption of 9%. We see scope for earnings upside for IIG from 1) new services, and 2) M&A. New revenue stream will come from MarTech, InsureTech and HealthTech.