Daily Brief Singapore: Info-Tech Systems, Olam Group and more

• Info-Tech Systems is a rapidly growing, profitable provider of cloud-based Human Resource Management (HRM) and accounting software, primarily targeting Small and Medium Enterprises (SMEs) in Southeast Asia.
• The company’s growth is underpinned by the strong digitalization trend among SMEs, supported by government initiatives. Its strategy is focused on geographic expansion from its core Singapore market into Malaysia, Hong Kong, and India.
• While the company boasts a high-margin, recurring revenue model and a debt-free balance sheet, it faces risks from high market concentration in Singapore and increasing competition from larger, established players like Zoho and SAP.

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• Olam Group is undergoing a significant strategic reorganization, separating into three distinct operating units: ofi (Olam Food Ingredients), Olam Agri, and the Remaining Olam Group. This move is designed to unlock shareholder value through focused strategies and potential capital market activities, including IPOs and divestments.
• A key milestone in this reorganization is the announced sale of its entire stake in Olam Agri to the Saudi Agricultural & Livestock Investment Company (SALIC), which is expected to significantly deleverage the Group’s balance sheet and fund strategic investments into ofi.
• Despite strong top-line revenue growth historically, the company has demonstrated a troubling trend of deteriorating profitability and negative cash flow, with significant declines in net income, EPS, and free cash flow over the past decade, posing risks to dividend sustainability and shareholder returns.

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