CGS International
August 12, 2025

Info-Tech Systems: Riding the SaaS Wave in Asia’s SME HRMS Market with Explosive Growth and High Returns

Introduction

Info-Tech Systems Limited (ITL), Singapore’s only publicly listed SaaS-based HRMS provider, is making significant strides across Asia, providing affordable, purpose-built human resource and accounting software to SMEs. Following its July 2025 IPO, ITL stands out for its asset-light business model, robust financials, aggressive geographic expansion, and strong competitive positioning in a sector benefiting from digital transformation and government support.

Key Investment Highlights

• Initiation Rating: Add
• Target Price: S\$1.10 (32.5% upside from S\$0.83)
• Market Cap: S\$214.1m (US\$166.5m)
• Dividend Yield (2025F): 4%
• ROE (2025F): >80%
• Net Profit CAGR (FY24-27F): 14%
• Cash Position (post-IPO): ~S\$60m
• Recurrence Rate (1H25): 94% customer retention, 50% recurring revenues

Business Model and Market Position

ITL delivers cloud-based HRMS and accounting solutions tailored for SMEs in Singapore, Malaysia, India, and Hong Kong. By June 2025, the company boasted 25,300 HRMS customers and a 94% retention rate, capturing an estimated 10% market share in Singapore’s SME HRMS market in 2024.

• Affordable Pricing: ITL’s HRMS costs S\$2.5 per employee per month—less than half the average S\$6.2 charged by local peers.
• SME-Focused: Designed as a cost-effective alternative to complex and expensive ERP solutions from global vendors like SAP and Oracle (ERP pricing starts at US\$70/user/month, with hefty implementation fees).
• Quick Support: Customer queries resolved within 4 hours, compared to industry averages of 1-3 working days.
• Government Backing: Approved under Singapore’s Productivity Solutions Grant, letting SMEs claim up to 50% of eligible digital tool costs.

Financial Performance and Forecasts

Table: Financial Summary (S\$m unless stated)

• Revenue Growth: 10.9% YoY in FY24, projected 8.7% in FY25F, driven by new customer additions in Malaysia and India.
• Margins: Core operating margin at 34.1% in FY24; forecast to remain above 34% through FY27F.
• Cash Generation: Net cash position of S\$33.7m (June 2025), forecast to rise to S\$83m by 2027F; capex needs remain minimal due to asset-light model.
• Dividend Policy: Target 50% payout ratio for FY25F-26F; interim dividend of 1.55 Scts declared for 1H25 (48% payout).

Growth Strategy: Customer Acquisition and Geographic Expansion

• Malaysia & India Lead Growth: Added 2,500 net new HRMS customers in 1H25, mostly from Malaysia and India. Revenue CAGR in Malaysia: 18%, India: 29% forecast for FY24-27F.
• Deeper Penetration: Plans to ramp up marketing, expand salesforce, and launch new products (Accounting, Academy) in new and existing markets.
• Cost Optimization: Shifted customer support and R&D teams to Malaysia and India, reducing per-employee costs by 5-7% annually over FY22-24.
• Product Portfolio Expansion: Upcoming launches in CRM, Point-of-Sale, and Field Service Management software.
• Inorganic Growth: Exploring acquisitions to enter new markets and broaden offerings.

Competitive Landscape: Peer Comparison

Table: Peer Valuation Comparison (Selected)

• Valuation: ITL trades at 14.3x 2025F P/E, at a 50% discount to global peers (average 38.2x), despite superior ROE and dividend yield.
• Competitive Edge: Market fragmentation and ITL’s SME focus provide insulation from global ERP giants and high switching costs benefit customer stickiness.

Product Suite and Services

• HRMS: Core offering with nine modules (HR software, time attendance, payroll, leave, claims, scheduling, performance, project costing, applicant tracking).
• DigiSME: Simplified HRMS and accounting for micro-SMEs (three modules only).
• Accounting Software: Launched 2022; now 1,400 users. Features include invoicing, billing, inventory, bank reconciliation, and simplified versions for early-stage businesses.
• Learning Management System (LMS): Launched in Malaysia and Hong Kong in 2025, integrated with HRMS for employee training and progress tracking.
• Academy: 12 WSQ-approved courses since 2023, >4,000 registrations, revenues doubled from S\$1.5m in FY23 to S\$3.3m in FY24.
• Jobs Lah: AI-powered job portal launched 2023, 100,000+ job seekers, 7,000 employers; a lead generator for ITL’s products.
• Hardware: Sells RFID, biometric, and facial recognition access control systems, integrated with HRMS.

Revenue Mix (FY24):

• Singapore: 75% (core market)
• Malaysia: 19%
• Hong Kong and India: 6%

Growth Catalysts and Risks

Key Upside Catalysts

• Faster customer acquisition, especially in Malaysia and India via expanded marketing and sales teams
• Margin expansion from further cost optimization (shifting to lower-cost cities like Madurai in India)
• Increased government support for SME digitalization across Singapore, Malaysia, and India

Key Risks

• Heightened competition from local and global players, especially if large ERP firms target SMEs
• Macroeconomic uncertainty impacting SME budgets and renewal rates
• Potential increases in customer acquisition costs if competition intensifies

Industry Outlook: A US\$17 Billion Opportunity

• The combined SME HRMS and accounting software market in Singapore, Malaysia, India, and Hong Kong is valued at US\$3.3bn in 2024, only 19% of the US\$17.3bn addressable market.
• Expected to grow to US\$4.3bn by 2027 (10% CAGR).
• Market tailwinds from accelerated digital adoption, hybrid work, rising SME formation, and supportive government grants.

Government Policy Tailwinds

• Singapore: Productivity Solutions Grant (up to S\$30,000, 50% reimbursement), Enterprise Development Grant (up to 50% reimbursement), SkillsFuture upskilling programmes.
• Malaysia: Smart Automation Grant, MSME Digital Grant, MyDIGITAL Blueprint (targeting 22.6% of GDP from digital economy by 2025), e-Invoice regulation, Employment Act compliance.
• India: Digital India Programme, MSME digital transformation schemes (Udyam registration, digital infrastructure support), government-supported incubators and accelerators (T-Hub, Startup India Hub).

ESG and Corporate Governance

• ITL is proactively addressing ESG issues, recognizing the growing relevance to investors and customers.
• Efforts include acknowledging climate change, diversity, ethical labor practices, and transparency.
• Potential for rising ESG compliance costs in the short term, but likely to improve long-term sustainability and reputation.

Leadership and Management Team

• Lee Kim Heng Peter (Executive Chairman): Co-founder, strategic leadership, stakeholder engagement, extensive experience in product management and sales.
• Setin Subramanian Dilip Babu (CEO): Co-founder, leads business performance, marketing, innovation, expansion into new markets, and product launches.
• Yeoh Sin Yee (COO): Oversees operations across all major business units, with long tenure and operational experience.
• Gan Lai Thong (CFO): 20+ years in finance roles at port, manufacturing, and financial institutions.
• Dinesh Kamal Somanchi (CTO): Architect of ITL’s SaaS transition, cloud strategy, and product innovation.

Financial Forecasts and Key Metrics

Table: Key Financial Ratios and Drivers

Conclusion: A Compelling SaaS Play in Asia’s SME Digitalization Boom

Info-Tech Systems stands poised for sustained growth as it leverages its strong cash position, asset-light model, and deep understanding of SME needs to expand regionally. With an attractive valuation, high margins, and a scalable SaaS business, ITL offers investors exposure to Asia’s rapidly growing SME digitalization trend, underpinned by recurring revenues, robust government support, and an expanding addressable market.

Appendix: Coverage Universe and Ratings Definitions

• Stock Ratings:
  • Add: Total return is expected to exceed 10% over the next 12 months.
  • Hold: Total return between 0% and 10%.
  • Reduce: Total return below 0%.
• Sector and Country Ratings:
  • Overweight: Above-market weight relative to benchmark.
  • Neutral: Neutral weight relative to benchmark.
  • Underweight: Below-market weight relative to benchmark.