BAT Malaysia: Buying Cash Flows, Not the Narrative

British American Tobacco (Malaysia) Berhad is not your typical growth story. It is a classic case of defend and optimise. The cigarette market is structurally declining, illicit trade remains a persistent thorn, and new categories like vaping are still too small to offset the combustible base.

Yet, despite shrinking volumes, BAT Malaysia continues to generate enviable returns: a 21% ROIC and 47% ROE in 2024. Cash flows remain durable, but only if pricing power, product mix, and cost discipline consistently outrun volume attrition.

This is where the investment case gets interesting. Markets often discount such companies too heavily, focusing on past declines rather than the resilience of the cash engine.

BAT Malaysia’s premium and value-for-money brands still fund dividends and strategic bets, but with revenue flatlining and fixed costs creeping up, efficiency gains are not optional - they are survival.

The valuation math suggests limited margin of safety today, but a disciplined investor might still see opportunity when the price fully reflects structural headwinds. So, is BAT Malaysia a value trap or a cash compounder in disguise? The answer lies not in chasing growth, but in testing the durability of its cash machine.

Read the full article at Defend and Optimise: The BAT Malaysia Investment Case for more insights. https://www.i4value.asia/2025/09/defend-and-optimise-bat-malaysia.html#more

Axiata’s Strategic Pivot: Transformation or Illusion?
Axiata once built its reputation as a sprawling mobile operator across Asia. Today, it claims to have transformed into a regional digital connectivity platform, with ventures in fintech, infrastructure, and enterprise services.

The story is compelling: exits from risky markets, mergers to consolidate strength, and a shift toward platform-driven growth. On the surface, this looks like a company ready to ride Southeast and South Asia’s booming digital wave.

But when you peel back the numbers, the picture is less inspiring. Over the past decade, revenue has barely grown, returns on capital still trail the cost of capital, and margins remain stuck. Even compared with peers, Axiata ranks near the bottom on profitability and shareholder returns.

So the question is — has Axiata truly pivoted into a stronger, value-creating business, or is this just another corporate reinvention that sounds better than it performs?

My deep-dive analysis suggests cautious optimism but no margin of safety at today’s price. Axiata may be worth watching — but is it worth buying yet?.

For more insights go to Axiata’s Strategic Pivot: Progress or Premature Optimism? https://www.i4value.asia/2025/08/axiatas-strategic-pivot-progress-or.html#more

Astro’s Digital Gamble: Can Malaysia’s Pay-TV Giant Reinvent Itself Before It’s Too Late?
For two decades, Astro Malaysia Holdings was the undisputed leader of Malaysian Pay-TV. Its satellite dishes crowned rooftops nationwide, its channels dominated living rooms, and its financial performance seemed rock solid.

But the media landscape has changed dramatically. Streaming platforms like Netflix, Disney+ and YouTube have captured audience attention. The once-invincible Astro now faces declining revenues, shrinking profits, and the challenge of redefining itself in a digital age.

To counter this disruption, Astro has embarked on an ambitious transformation. It has launched Astro Fibre to bundle broadband with content, integrated global streamers into its Ultra and Ulti Boxes, and pushed its own OTT platforms such as sooka.

The company is positioning itself not just as a broadcaster, but as a converged media-tech platform that combines entertainment, connectivity, and enterprise services.

The question for investors is whether these moves are enough. From 2016 to 2025, Astro’s revenue contracted at an annual rate of 6.2%, while net profits fell to just one-fifth of their former levels.

Yet Astro is not without strengths. It continues to generate healthy cash flows, maintains a solid financial base, and offers bundled services that still resonate with local consumers.

At today’s share price, the stock even trades below its estimated intrinsic value, suggesting possible upside—if management can stabilize the business.

Astro’s future now hinges on execution. Will its digital pivot create a leaner, cash-generating platform fit for the streaming era—or is this another case of too little, too late?”

For more insights go to “Astro Malaysia: Digital Pivot or Declining Giant?” https://www.i4value.asia/2025/08/astro-malaysia-digital-pivot-or.html#more

Forget Blockchain: Zetrix’s Secret Weapon Could Be AI + Robotics

Zetrix, formerly known as MyEG is a Malaysian digital services company that connects government, businesses, and consumers through its online platforms. Originally focused on e-Government services, it has since expanded into commercial digital offerings, from bill payments to insurance renewals.

Today, the company is pushing into blockchain with its Zetrix platform, enabling cross-border trade, digital credentials, and next-generation decentralized services.

In April 2025, MyEG and its Chinese allies established the China‑ASEAN AI Innovation Cooperation Centre at its Zetrix Tower. This government-backed lab will develop a national AI model, generative AI tools, robotics solutions, and AI-powered cross‑border ID systems.

Zetrix AI aims to integrate blockchain + AI + robotics, establishing itself as a digital tech leader bridging government and commercial sectors across the region.

While it is too early to see the impact of this AI push, it is instructive to note that its revenue in 2024 jumped up 31 %. PAT also increased substantially by 46 %. This surge was primarily driven by the rapid growth of its Web3 services, especially revenues from sales of digital assets via its Zetrix blockchain platform, layered on top of its traditional e-government and commercial digital platforms.

The company is trading today at about an Acquirer’s Multiple of 10 falling into the boarder of the Gem and Goldmine quadrants on the Fundamental Mapper.

Unfortunately Zetrix is a unique hybrid of e-Government digital services, commercial digital transactions, and new blockchain/Web3 ventures. As such there is no realy global peers. But if you look at other digital infrastructure and fintech businesses (Paytm of India, Ant Group of China, Indra Sistemas of Spain and Sopra Steria of France), the Acquirer’s Multiple ranged from 5 to 12.

Given that Zetrix’s revenue jump was driven by its blockchain platform, while its AI initiative is still at an early lab stage, the current valuation at 10x Acquirer’s Multiple likely reflects market caution on near-term earnings contributions from AI.

As Zetrix moves from proofs-of-concept to monetized AI applications, we would expect the market to reprice, provided execution risks tied to multi-jurisdiction operations and geopolitical partnerships are well managed.

Systech’s Big Bet on AI & Cybersecurity: Turnaround Story or Just Another Tech Mirage?

Systech started out as a niche provider of e-Business solutions, developing software platforms for direct selling and membership-based industries. Over time, it expanded into CyberSecurity, building capabilities in monitoring and protecting digital assets.

Facing persistent losses in its legacy MLM software business, Systech eventually exited this segment and repositioned itself by acquiring new ventures like Wilstech and TalentCloud AI.

Today, it stands as a digital transformation and cybersecurity group, offering solutions across AI, IoT, ERP, and information security. While its customer base spans Malaysia, Singapore, and parts of Asia, its revenues remain largely project-driven, reflecting both growth opportunity and concentration risk.

Its financial performance reflects this changing business profile. Over the past six years, while revenue roughly doubled, operating income fell from RM2.5 million in 2019 to an operating loss of RM2.7 million in 2024.

At this point, Systech is still in a transition phase, with no clear signs of operating stability. Revenues remain project-based, gross profit margins have been shrinking, and there is no evident margin recovery. The equity base has also eroded materially.

While the business has been strategically repositioned, the next 1-2 years will be crucial to determine whether its ventures with Wilstech and TalentCloud AI can evolve into a genuine financial turnaround, delivering positive margins and more stable earnings.

Given this picture, it is no surprise to find Systech currently placed in the Quicksand quadrant of the Fundamental Mapper.

For more insights go to Systech: Attractive Vision, Elusive Value https://www.i4value.asia/2025/08/systech-attractive-vision-elusive-value.html#more

G3 Global is Betting on AI. Is It Worth the Roller Coaster?

G3 Global exited its non-core apparel businesses by 2019 to focus on ICT, especially AI, IoT, and smart mobility. It established Atilze AI and partnered with SenseTime to position Malaysia as a regional AI hub for surveillance and facial recognition. In 2021, G3 briefly ventured into healthcare, but by 2023 had shifted back to large ICT projects, notably the AIS3 AI security system for KLIA and KLIA2.

Its financial performance has mirrored these business shifts, with only a marginal operating profit in 2023 over the past six years.

Looking ahead, G3 Global is set to remain focused on large-scale, project-driven deployments that integrate AI, surveillance, and smart infrastructure. Building on its AIS3 contract, the company is positioning itself as a specialist system integrator combining AI with security and mobility solutions.

However, the business remains heavily reliant on securing similar big-ticket projects, with limited recurring software revenues. Its future hinges on converting its AI expertise and partnerships into new contracts for smart city, airport, or government security initiatives, while also exploring opportunities in AI-supported healthcare tech.

Given this picture, it’s no surprise to see G3 Global positioned in the turnaround quadrant on the Fundamental Mapper.

From an investment perspective, G3 Global resembles a high-beta AI integrator leveraged to public sector security and smart city spending. While the SenseTime relationship and the flagship KLIA project provide strategic visibility, the lack of recurring revenue, volatile earnings, and a still fragile balance sheet suggest investors should watch closely for signs of a real turnaround, such as:

• Conversion of new pipeline contracts post-KLIA,

• How much of their solutions represent true AI IP versus pass-through hardware or software integration, and

• Whether they can build any high-margin proprietary platforms.


For more insights into G3, refer to Is G3 Global an investment opportunity at https://www.i4value.asia/2025/08/is-g3-global-investment-opportunity.html#more

Agmo: Can This Malaysian App Builder Become an AI Giant?

Agmo is a Malaysian digital solutions provider, with its main revenue derived from mobile and web application development. Other revenue streams include subscriptions, technical support, and platform-based services (such as Vote2U and Agmo Loyalty).

The company reported healthy revenue and profit growth from 2020 to 2025. However, its ROE declined from 30% in 2020 to 18% in 2025, primarily due to an enlarged equity base following its 2022 IPO.

Post-IPO, revenue growth has moderated while gross margins have remained relatively stable. However, the SGA margin has risen from 8.5% in 2023 to 12.5% in 2025, suggesting that ROE could come under further pressure unless Agmo reignites top-line growth and improves cost discipline.

Agmo is building internal AI infrastructure, positioning itself as a national leader through MerdekaLLM. It is also scaling into enterprise AI services via strategic partnerships and a new JV. This multi-faceted approach—from infrastructure to applications—reflects a deliberate push to transition from an app developer to an AI solutions provider.

Agmo’s pivot into AI infrastructure and sovereign LLMs is strategically compelling and could open up new high-value enterprise and platform revenue streams. However, given the rising operating cost base and the early-stage monetisation of its AI initiatives, it remains uncertain whether this will meaningfully reverse the slowdown in revenue growth or drive margin expansion in the near term.

The company currently trades at an Acquirer’s Multiple (EV/EBIT) of about 12. This sits comfortably within the Malaysian ICT software and services range of 9 to 15, but remains well below the global software sector, where multiples typically exceed 20. But you should consider whether the Malaysian software market offers comparable growth prospects to justify a rerating to global valuations.

ITMax: This AI-Powered Infra Player Just Doubled Profits — But Can It Keep Up?

ITMAX is an integrated digital infrastructure provider for smart cities, embedding AI primarily in its video analytics, traffic flow optimization, and predictive maintenance systems. Its proprietary AI-driven platforms interpret data from surveillance cameras, traffic sensors, and lighting networks to enable automated responses and more efficient urban management.

The AI is not the business by itself, but a critical enabler inside ITMAX’s smart surveillance, traffic, and maintenance systems, improving operational efficiency, automation, and customer lock-in.

Since its 2022 IPO, ITMAX has doubled both its revenue and PAT. However, gross margin has declined from 73% in 2022 to 61% in 2024, partially offset by improved operating leverage with SGA margin down to 15.5% versus 18.4% in 2020. ROE has stabilised at around 22%.

The key question is whether ITMAX can sustain its strong revenue momentum. It has a proven track record with Malaysian municipal governments, securing long-term contracts (e.g., 15-year smart traffic and surveillance deals in Johor). While the business remains concentrated in Klang Valley, it is expanding rapidly into Johor, Penang, and other states. As of FYE 2024, its order book stands at RM1.4 billion, locking in revenues until 2040.

ITMAX is well-positioned to maintain healthy double-digit growth (likely in the 15–20% range) over the medium term, driven by secured contracts, cross-selling opportunities, and expansion into new councils. That said, the exceptional 42% CAGR achieved from 2022–2024 was largely fueled by large upfront system deployments, which will taper into steadier service-driven growth.

Strategically, ITMAX is best understood as a regional operator of AI-enabled smart city infrastructure networks, providing end-to-end design, deployment, and long-term operation of public surveillance, traffic, and lighting systems. This is akin to a micro-scale Motorola Solutions or Hexagon urban division, but with direct ownership of underlying fibre and digital infrastructure, enhancing control and customer stickiness.

From an investment perspective, ITMAX currently trades at an Acquirer’s Multiple of about 34, which is well above typical sector multiples of 10–20. For example, Motorola Solutions and Hexagon’s smart infrastructure divisions typically range between 12 to 20. ITMAX’s premium valuation reflects high market expectations for its growth trajectory and embedded asset base.

Positioning for Recovery: Muhibbah on the Edge of a Turnaround

Muhibbah Engineering (M) Bhd is a diversified engineering and infrastructure group.

Between 2019 and 2024, it transitioned into a more focused, vertically integrated solutions provider for the oil & gas and infrastructure sectors. Its core divisions—construction, cranes, concessions, automation, and shipbuilding—remained, but with sharper strategic focus.

Automation, initially an acquisition, became a formal growth pillar, while the crane segment, via Favelle Favco, expanded globally. The infrastructure arm deepened its specialization in platforms, petrochemical works, and heavy steel fabrication, supported by in-house yards. Concessions, especially Cambodia airports, remained relevant but faced regulatory headwinds.

Despite these shifts, performance was weak. Revenue grew at just 3.4% CAGR over six years, with a major loss in 2020 and lackluster ROEs through 2023. The pandemic severely disrupted operations and concession earnings, while recovery was hampered by low margins, underutilized assets, and inflation. ROE only turned meaningfully positive in 2024, reaching 7.7%, as earnings rebounded across concessions, marine, cranes, and automation.

As such you should not be surprised to see it being mapped onto the border of the Turnaround and Gem quadrants in the Fundamental Mapper.

Sustained improvement will depend on global macro stability, continued recovery in travel and infrastructure, and Muhibbah’s ability to execute well and navigate concession-related risks.