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The race between Amazon AWS, Microsoft Azure and Google Cloud to become to market leader in cloud computing had led investors to think – why are these giants are deploying so much capital into the cloud sector?

Apart from the “gentle push” of the pandemic for the world to adopt cloud computing quicker, it was also predicted that cloud system infrastructure services (IaaS) would grow by approximately 27 percent in 2021 as compared to 2020. Cloud computing has become more and more important and inevitable to become the new norm for businesses and average-joe user like you and me.

However, we should be focusing on investing in the company that are involved in cloud and is one that could generate the most return to us. Are there even any companies in Malaysia that are in the massive cloud business?

There is one major player in Malaysia. And fortunately for investors, this company is listed; and based on its ultra-low single digit PER, this company is still un-discovered by most investors!

And this one company would be ARB Berhad (ARBB). ARBB stands out as the enabler for Small & Medium Enterprises (SME) to get involved in the benefit of cloud services via their Enterprise Resources Planning (ERP) sector. ARBB had taken the initiative to absorb the upfront investment of SMEs to use cloud IaaS, by doing so, ARBB would profit from the growth of the SME and rather than a one-off profit, ARBB could create a sustainable source of earnings growth.

Let’s talk numbers.

ARBB had achieved a record profit since its successful turnaround from a timber company where it was backed by a bottom line of MYR 19.7 Million. Alongside with a strong net cash position of MYR 24.5 Million, the group was also seeking any potential M&As in the cloud segment.

For more information, click on this link to read more: https://focusmalaysia.my/featured/arb-sees-cloud-computing-as-its-magic-carpet-to-scale-greater-heights/

The article was also showing some interesting statistics. For example, the group is currently having the lowest PER in Technology Board in Bursa Exchange. When we compare to MI, INARI, VITROX and so forth who has the PER of 65 times, 64 times and 89 times respectively, ARBB’s current PER of 4.3 times is ridiculously cheap!

So why is ARBB not being discovered by majority of the investor? I believe this was caused by the complexity of the company’s business. Only a very small portion of investors understand cloud computing and ERP. Hence, the opportunity shines upon us to invest in this deeply undervalued company!

Luckily for us, the company’s share price had retraced from recent high due to global flattened investment sentiment mainly disrupted by the spiking of US 10 Years Bond Yield. And I believe now is the best chance for us to invest in this company!


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