UOB Kay Hian
Date of Report: Friday, 25 July 2025

Zetrix AI Bhd: Riding the Wave of Malaysia’s Blockchain Revolution

Executive Summary: Strong Buy Recommendation and Robust Growth Potential

UOB Kay Hian maintains a BUY call on Zetrix AI Bhd (ZETRIX MK), setting a target price of RM1.46 per share, which represents a compelling upside of 59.2% from the current price of RM0.915. Zetrix AI stands at the forefront of digital innovation in Malaysia, offering e-government services that span the road transport, immigration, and healthcare sectors. With Malaysia’s Blockchain Infrastructure (MBI) and the My Digital ID Superapp poised for full rollout by the end of 2025, Zetrix is strategically positioned to unlock new revenue streams while continuing to generate robust recurring income.

Company Overview: Digital Public Services Pioneer

• Sector: Industrials
• Market Cap: RM7,046.1 million (US\$1,670.8 million)
• Shares Issued: 7,700.7 million
• Major Shareholders: Asian Internet Holdings (13.51%), Wong Thean Soon (13.50%), CIMB Group (5.20%)
• 52-week Price Range: RM1.06/RM0.68

Key Catalysts: Blockchain Infrastructure and Digital Identity Rollout

• Malaysia Blockchain Infrastructure (MBI): Expected to be fully operational by end-2025, offering Zetrix a first-mover advantage as the government accelerates blockchain adoption. Potential use-cases include tokenizing financial instruments such as bank guarantees and bankers’ acceptances.
• My Digital ID Superapp: In collaboration with MIMOS, Zetrix is developing a platform that integrates government databases and provides single sign-on (SSO) for identity verification. Monetization comes from one-off registration fees and recurring subscription modules for commercial entities leveraging My Digital ID as a unified login solution.

Recent Developments: Regulatory Hurdles and Strategic Responses

• Bursa Malaysia Reprimand: Zetrix faced public reprimand and director fines totaling RM150,000 per director due to alleged misleading announcements in 2023. Management clarified no impact on current concessions or businesses. Zetrix is seeking judicial review against the penalty.

Financial Highlights: Consistent Growth and Strong Margins

Strategic Ventures: Expanding Blockchain and Cross-Border Trade

• Pioneer Blockchain Development: Over RM1 billion invested in proprietary Zetrix blockchain, with applications such as Ztrade (China customs integration), certificate of origin authentication, verifiable credentials, and digital signing. These solidify Zetrix’s position in the domestic e-government sector.
• Ztrade Cross-Border Services: Commercial launch with China customs in June 2024, offering two-way verification and exchange of digitized trade documents. Zetrix charges RMB200 per document, with Ztrade now being integrated into Malaysia’s National Single Window for broader trade applications. Current transaction volume is approximately 15,000 per month from various freight forwarders in 1H25.
• Revenue Projections: Full-scale utilization of blockchain services could generate annual revenue exceeding RM650 million, with 4.5–5.0 million Zetrix coin sales forecasted for 2024–25 at an average price of US\$12, translating to pre-tax profits of RM200–220 million.
• e-CNY Integration Pilot: Approval from the People’s Bank of China and Bank of China to pilot e-CNY integration, enabling storage and payments for users outside China. Zetrix will benefit from transaction fees and the float on e-CNY balances.

Profit Breakdown by Segment

Financial Position and Outlook

• Strong Balance Sheet: Shareholders’ equity is projected to grow from RM2.85 billion in 2024 to RM4.50 billion in 2027, with net cash increasing from RM374 million to RM715 million over the same period.
• Leverage: Debt to equity ratio is expected to steadily decline from 44.4% in 2024 to 28.1% in 2027, with net debt to equity dropping to 12.2% by 2027.
• Profitability: EBITDA margin is anticipated to rise from 79.3% in 2023 to 89.0% in 2027, with net margins consistently above 65%.
• Growth Trajectory: Turnover is forecasted to grow from RM1,017 million in 2024 to RM1,265 million in 2027, with net profit increasing from RM680 million to RM856 million over the same period.

ESG Initiatives: Commitment to Responsible Growth

• Environmental: Carbon footprint limited to office energy consumption.
• Social: RM2.5 million invested in community support for over 50 charity groups in 2020.
• Governance: Adherence to the Malaysian Code on Corporate Governance (MCCG).

Product Roadmap: Ongoing Innovation

• 2022–2023: ZTX mainnet launch, interoperability with other chains (Xinghuo, Ethereum, Polygon), ZTX token sale, crosschain NFT transfers, and pilot for cross-border supply chain financing.
• 2024: Official rollout of cross-border blockchain trade facilitation with China.
• 2025: Launch of My Digital ID Superapp (joint venture with MIMOS).

Valuation and Recommendation

UOB Kay Hian reiterates its BUY recommendation with a target price of RM1.46, implying a 2025 PE of 15x and representing a significant discount to the historical mean. Zetrix AI Bhd is poised to benefit from nationwide blockchain adoption, digital ID rollout, and expanding cross-border digital trade — all underpinned by strong financials, a leading market position, and forward-thinking management.

Conclusion: Zetrix AI Bhd – A Compelling Play on Malaysia’s Digital Future

With its pioneering blockchain ventures, key government partnerships, and robust recurring revenue base, Zetrix AI Bhd stands out as a high-conviction investment idea for those seeking exposure to Malaysia’s rapid digital transformation. The company’s upcoming catalysts, healthy financial metrics, and proactive ESG efforts make it a standout opportunity in the regional tech and e-government services landscape.