SNS Network’s AI Ambitions: Primed for a Turnaround?

The Growth Engine:
1. Record Performance: Q1 FY26 net profit soared 174% to RM10.24M on record revenue of RM822.75M, driven by strong ICT sales.
2. Retail & DaaS Expansion: Adding 10 new retail outlets and scaling its Device-as-a-Service (DaaS) subscription model.
3. Major AI Pivot: Launched an "AI factory" to provide Graphics Processing Unit-as-a-Service (GPUaaS) and targeting 500 AI super server sales in FY26.
4. Financially Sound: Healthy net cash position of RM27.8M provides a buffer for expansion and market volatility.

Key Risks & Headwinds:
1. Market Skepticism: The steep share price decline reflects investor caution on execution risks and macro uncertainties.
2. Execution Hurdles: Missed the previous year's AI server sales target, highlighting potential sales cycle challenges.
3. Geopolitical Risks: US export controls on high-end GPUs and US-China trade friction could impact the broader ICT supply chain.

Investor Outlook:
SNS trades at a significant discount despite its strong performance and strategic positioning at the intersection of digitalisation, AI, and cloud. This appears to be a "show me the results" story. The next few quarters will be crucial for SNS to prove it can convert its ambitious AI vision into consistent earnings growth.

For investors willing to look past the volatility, this could be an under-the-radar AI beneficiary worth watching.

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