Broker: UOB Kay Hian
Date of Report: Monday, 25 August 2025

Zetrix AI Delivers Strong 2Q25 Results: Blockchain and E-Government Drive Impressive Growth

Overview: Zetrix AI Surges Forward with Ambitious Blockchain Expansion

Zetrix AI, a key Malaysian provider of e-government and blockchain-enabled services, has posted another robust quarter, driven by the stellar performance of its blockchain division and steady contribution from its e-government operations. The company continues to build on its momentum with innovative product launches and strategic partnerships, positioning itself as a leader in digital transformation for government and business services. UOB Kay Hian maintains its BUY recommendation with a higher target price of RM1.52, reflecting strong upside potential.

Company Snapshot: Zetrix AI at a Glance

• Share Price: RM0.895
• Target Price: RM1.52 (Upside: +69.8%)
• Market Cap: RM6.88bn (US\$1.63bn)
• Shares Issued: 7,691.7 million
• GICS Sector: Industrials
• 52-week High/Low: RM1.06 / RM0.68
• Major Shareholders: Wong Thean Soon (13.60%), Asian Internet Holdings (13.46%), Kumpulan Wang Persaraan Diperbadankan (4.92%)

2Q25 Financial Performance: Beating Expectations

Zetrix AI’s second quarter of FY2025 saw accelerated growth, with core net profit rising to RM204.3 million (+3.5% QoQ, +23.5% YoY) and revenue climbing to RM307.9 million (+2.6% QoQ, +27.1% YoY). This outperformance means 1H25 results already account for 56% of UOBKH’s and 54% of consensus full-year forecasts, demonstrating the company’s robust earnings trajectory.

Key Observations

• Blockchain Segment: Contributed approximately RM151m in 2Q25 revenue, or 49% of total revenue, with most from token sales (50%).
• Dividend: Declared a 0.25 sen interim DPS in 2Q25 (0.3% yield), matching the previous year’s interim dividend.
• Margins: Margins remained robust, with slight expansion noted QoQ.

Business Segments: Growth Engines and New Launches

Blockchain: Driving Future Profitability

The blockchain segment is at the heart of Zetrix AI’s growth strategy. It not only delivered strong revenue in the latest quarter but is also expected to fuel further upside as new applications launch and existing platforms gain traction.

• Token Sales: Projected 4.5-5.0 million Zetrix coin sales in 2024-25 at an average price of US\$12, potentially yielding RM200-220m in pre-tax profit per year.
• Service Fees: Revenue streams include gas fees, service/credential fees, and annual charges, with full-scale Ztrade utilization potentially generating over RM650m annually.
• Product Roadmap: The launch of new blockchain applications (Nur AI, digital bank guarantees, Ztrade, My Digital ID) is expected to boost transaction and recurring fee income.

E-Government: Steady Contributor

Zetrix AI’s e-government offerings—spanning road transport, immigration, and healthcare services—continue to provide stable revenue, supporting growth while blockchain ventures scale.

Recent Developments: Regulatory and Product Highlights

Legal and Regulatory Update

• The High Court granted leave for Zetrix AI to proceed with a judicial review against a recent Bursa Malaysia reprimand related to 2023 announcements. Seven directors were fined RM150,000 each, but management confirms no impact on current concessions or business operations.

NurAI Launch: Tapping the Global Muslim Market

• Zetrix has launched NurAI, a Shariah-compliant large language model (LLM) for conversational AI and text-based assistance, designed in line with Islamic values. With Muslims comprising 25-28% of the world’s population (~2 billion), NurAI targets a massive, underserved market, offering subscription packages to individuals and corporations.

My Digital ID: Integration and Monetization

• Development of the MY Digital ID Superapp (in partnership with MIMOS) is progressing, with use-cases in Single Sign On (SSO) for government services (MySejahtera, MyJPJ, MyHRMIS). Zetrix will monetize via registration fees and recurring modules for commercial clients.

Ztrade: Cross-Border Blockchain Trade with China

• Ztrade, launched in June 2024, enables two-way verification and exchange of digital trade documents with China Customs, charging RMB200 per document. It is being integrated into Malaysia’s National Single Window for trade. Ztrade processed ~15,000 transactions per month in 1H25 from various freight forwarders.

Financial Forecasts and Key Ratios

Segmental Profit Breakdown: Zetrix and World ID to Lead Growth

Earnings Revision and Valuation

• Earnings forecasts for 2025-2027 have been raised by 10-12% to reflect stronger blockchain-driven growth.
• BUY rating reiterated, with the target price upgraded to RM1.52, based on 14x 2025F PE (-0.5 SD below mean).

Environmental, Social, and Governance (ESG) Initiatives

• Environmental: MYEG’s footprint is limited to office energy consumption, with negligible impact on biodiversity or climate.
• Social: Adheres to the UN International Bill of Human Rights; RM2.5m contributed to over 50 charity groups in 2021.
• Governance: Practices in line with the Malaysian Code on Corporate Governance (MCCG).

Financial Position and Key Metrics

Strategic Outlook and Conclusion

Zetrix AI’s 2Q25 results underscore its powerful combination of innovative blockchain solutions and reliable e-government services. The company is on track to deliver above-market earnings growth, driven by new product launches, significant addressable markets (such as NurAI for Muslim users), deep integration with government digital infrastructure, and expanding cross-border trade facilitation. With a strong financial profile, ambitious product roadmap, and continued commitment to ESG, Zetrix AI stands out as a compelling long-term investment opportunity in the digital transformation space.

About the Broker

UOB Kay Hian is a leading financial services group with deep expertise in Asian equity research, providing actionable insights for investors and market watchers.