Period 1Q12
Actual vs. Expectations
1Q12 net profit of RM2.0m accounted for 12% and 10% of ours
and the street’s full year estimate of RM17.4m and RM19.5m respectively.
However, we deemed the result to be within expectations
given that 1Q is normally the weakest quarter and contribute less than 15% of the
full year earnings based on the historical trend.
The group strongest quarter usually fall into 4Q in view of
most government agencies await for their respective budget allocations and disbursements
during the final quarter of the year. Besides, the 4Q normally commands strongest
profit margins.
Dividends No dividend was announced during the quarter.
Key Result Highlights
YoY, revenue and net profit rose 11% and 3% respectively to
RM8.5m and RM2.0m, driven by higher level of maintenance income secured in relation
to the Financial Management Software & Services (FMSS) division (+6%).
However, the PBT came in
only +4% to
RM2.0m, no thanks
to higher operating costs.
QoQ, both the revenue and net profit dipped by 20% due to
lower contribution from the FMSS segment (-21%) as a result of the absent of
the Outcome Based Budgeting project in 1Q12.
Outlook
Remains bright supported by i) active tendering of contracts
for both the Indonesia and Malaysia markets for wealth management solutions and
banking services, ii) continued projects/contracts flow from various government
agencies e.g. the recent awards of new contracts by PERKESO and LHDN
Forecasts
Maintaining our F12-FY13 forecasts after the results.
Rating MAINTAIN OUTPERFORM
Valuation Maintaining our TP of RM0.61 based on unchanged
12.0x PER over EPS of 5.1 sen.
Risks
Failure to secure more projects.
Reduced government spending on ICT e.g. on upgrade of online payment systems,
etransactions, etc.
Source: Kenanga
It may be a weak start but we are all aiming for a strong finish, that was also the result for fleet management software a few years ago, but then they focused and stayed on track.
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