Zetrix AI Berhad: A Malaysian Tech Stock Delivering on Its Growth Promise
KUALA LUMPUR – In an investment landscape where unprofitable, high-concept stories frequently capture headlines and capital, finding a company that consistently executes on its financial fundamentals can be a refreshing discovery. For investors looking beyond the speculative fray, Zetrix AI Berhad (KLSE:ZETRIX) is drawing attention for translating its technological ambitions into tangible bottom-line growth.
The old market adage holds that share prices follow earnings over the long term. On that measure, Zetrix AI appears to be on a solid trajectory. Over the past three years, the company has compounded its earnings per share (EPS) at an impressive rate of 23% annually. This sustained growth provides a concrete foundation often absent in more hyped segments of the tech sector.
"The EPS growth story here is clear and validated," says David Chen, a portfolio manager at a regional asset management firm. "In the ASEAN tech space, such consistent profitability growth is notable. It suggests operational discipline and a viable business model, not just potential."
A deeper look reveals a nuanced picture. While the company's EBIT margins faced some pressure over the last year, this was offset by continued revenue expansion. Analysts suggest this could indicate strategic investment for scale rather than underlying weakness. The critical test will be whether management can stabilize margins while maintaining its growth momentum.
Perhaps more telling than the headline numbers is the significant skin in the game held by company insiders. With a collective stake worth approximately RM933 million, representing about 15% of the company, leadership's interests appear closely tied to those of shareholders. This alignment is further underscored by the CEO's compensation structure. For the year to December 2024, total CEO compensation was reported at RM206,000—a figure notably below the median for similarly sized companies on Bursa Malaysia and suggesting a performance-oriented culture.
"The insider ownership is a massive vote of confidence," notes Sarah Lim, an independent market analyst based in Singapore. "When founders and executives have such a large portion of their wealth tied to the stock, it generally means they are focused on creating sustainable, long-term value. The modest CEO pay, relative to peers, reinforces that principle."
However, not all observers are convinced. Marcus Thorne, a vocal critic and editor of the 'Sceptical Investor' newsletter, offers a sharper take: "Let's not get carried away. A few years of strong EPS growth in a favourable tech cycle is one thing. The real question is what happens when macro conditions tighten or competitive pressures rise. The margin contraction is a red flag they're glossing over. This is still a single-geography AI player facing global giants. The insider buying is positive, but it's not a force field against market realities."
Despite such caution, the overall narrative for Zetrix AI is one of a company checking several key boxes for fundamental investors: proven earnings growth, aligned leadership, and a reasonable valuation based on its financials. It represents a contrast to the 'story stock' investments that dominate chatter but often lack financial substance.
As with any investment, due diligence is paramount. The company's ability to navigate margin pressures and convert revenue growth into sustained profit will be its next major challenge. For now, Zetrix AI Berhad offers a case study in how Malaysian tech firms can achieve and demonstrate growth that resonates beyond speculative promise.
This analysis is based on publicly disclosed financial data and corporate filings. It is for informational purposes only and does not constitute financial advice. Investors should consider their own objectives and consult with a financial advisor before making any investment decisions.