KUALA LUMPUR: Kucingko Bhd, a 2D animation company, expects its topline to rise to between RM33 million and RM39 million in the financial years 2024 and 2025 (FY24/FY25).
Malacca Securities Sdn Bhd said the growth is expected to be driven by an increase in personnel, enabling Kucingko undertake more projects.
"As a result, we anticipate the core net profit to increase year-on-year by 31.2 per cent to 27.1 per cent to RM11.0 million to RM13.9 million.'s
"This growth is expected as margins improve due to the management's strategy to undertake more complex, higher-margin projects," the firm said in a note.
Malacca Securities observed that the consumption of digital media entertainment hadrisen over the years, reflected by the growing number of views on streaming platforms like YouTube, Netflix and Amazon Prime Video.
"The surge in digital entertainment consumption is expected to boost the demand for animation, which will positively impact Kuckingko's prospects," it added.
The firm said Kucingko, being located in Southeast Asia (SEA), benefits from cost advantages compared to its peers in Europe and the Asia Pacific region.
"In addition, we understand from Kucingko's management that Malaysians have an edge over regional peers in terms of understanding certain nuances in English.
"The combination of both strengths helps position the company in somewhat of a sweet spot, which we expect to favour Kucingko's position in the eyes of potential customers," it said.
Malacca Securities has not given a recommendation for Kucingko but has set a target price of 58 sen.