Datasonic Group (“Datasonic”) is an ICT solutions provider involved
in the provision of smart card personalisation, customisation of software and
hardware solutions, project management, consultancy, R&D and technical
consultancy. Since it was established in 1980, the group has formed a strong relationship
with several government agencies such as
National Registration Department (NRD) and Immigration Department of Malaysia
to provide smart card personalisation and customisation of software and
hardware solutions. The group has secured total contracts amounting to RM531.5m
as of 14 June 2012, of which the key contributor to the group’s order book is
the sale of cards segment, which accounted for RM357.8m or 67.3%. Based on the above
order book and their respective targeted completion date, we expect the group
FY12 and FY13 turnover to grow by +48% YoY
and 12% YoY to RM116m and RM129m, respectively. All in all, we expect the group
to record PAT of RM17.5m (+10.1% YoY) and RM21.8m (+24.6% YoY) in FY12 and
FY13, respectively. While we are not assigning any ratings to the stock, we
reckon that its fair value should be pegged at RM2.18, based on a FY12 PER of
9.0x (the average FBMKLCI Small Cap PER).
One-stop centre for
smart card personalisation.
Datasonic is a onestop outsourcing centre for financial
institutions and corporate customers with
regards to the personalisation of their ATM/PMPC and EMV cards. The group’s
regional personalisation solution (“RPS”) centre has obtained the certification
from various bodies such as Visa International, MasterCard International as
well as Malaysia Electronic Payment System on card issuance. This has enabled
the group to issue all kinds of ATM, debit and EMV card for all its banking
customers and provides them the competitive edge in terms of technical
strength.
The group has a
strong order book of RM531.5m as of June 2012 with most of the orders
secured from the local government agencies. The key contributor to the group’s order
book is its sale of cards segment, which accounted for RM357.8m or 67.3% of the
order book. We believe the segment is
related to a contract where Datasonic is
required to supply 10m new passport datapages to Immigration Department of
Malaysia during the next five years from 2013 onwards. We understand that the
balance of the remaining order book is scheduled to be completed by FY13.
Experienced
leadership team with a strong relationship with government agencies. The
group is led by an experienced Board with strong relationship to the various
government agencies. The group’s dedicated management team has been successful
in formulating and implementing its strategic plans in the past few years and
also in building a sound operational track record.
Expecting a strong
revenue in FY12. Based on the group’s order book and their respective
targeted completion date of each of the contracts, we expect the group to
achieve RM116m (+48% YoY) and RM129m (+11% YoY) turnovers in FY12 and FY13
respectively. Its FY12 and FY13 net profits meanwhile are expected to be at
RM17.5m (+10% YoY) and RM21.8m (+24%
YoY) respectively.
Downside risks in
the stock are 1) any unfavourable operational environments, 2) rapid changes in
technology and 3) its dependency on its parent company – Dibena Enterprise and
its end customer, NRD (National Registration Department).
Source: Kenanga
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