THE BUZZ
After securing two
contracts worth a total of RM33.5m from Pertubuhan Keselamatan Sosial
(Perkeso) last week, Century Software’s (CSHB) wholly-owned subsidiary, Century
Software (M) SB, has landed two more contracts totaling RM5.6m from Lembaga Hasil Dalam Negeri (LHDN)
to provide maintenance services as well as upgrade the latter’s Standard
Accounting System for Government Agencies (SAGA) for a period of 2-3 years. It
will also supply and install the related hardware and peripherals to ensure the
success of the assigned contracts.
OUR TAKE
No alterations to our forecasts but positive overall. We are positive with this 2nd
contract announcement in a week given that this beefs up the company’s
orderbook to about RM74.1m. However, we are keeping our current FY12/FY13
earnings forecasts of RM20.3m/RM21.6m since we had earlier factored in some
contract wins from its identifiable prospective projects of RM36.5m, with a
success rate of 80%.
Maintain BUY
recommendation at RM0.57. Given the slight pullback in the company’s share
price last week, we think this presents
a good
opportunity for investors to accumulate CSHB shares. Based on our
calculations, the company offers an attractive dividend yield of 4% at
only a
FY12/FY13 PER of 7.2x/6.8x, in
addition to a capital appreciation of
some 34% to our fair value (FV) of RM0.57, which is based on 9x FY13 PER.
Compared to the high PER valuation of 20x and
2% dividend yield of MYEG, its closest
listed proxy on Bursa Malaysia, the company makes
an even more attractive
investment
proposition. We maintain our BUY
recommendation, based on the company’s coup in securing some RM39.1m worth of
contracts within a week, as well as the potential of landing new projects worth
some RM36.5m.
Source: OSK188
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