Friday, August 30, 2013

Silverlake Axis: Attractive Yield With Strong Growth Potential (OSK)

Silverlake Axis: Attractive Yield With Strong Growth Potential
 (BUY, SGD0.72, TP: SGD0.89)

Coming away from our meeting with Management, we see a 16% net profit CAGR for the next two years, with upside potential should SILV’s orderbook replenishment beat expectations. As the counter offers an attractive FY14 dividend yield of 4.7%, we reiterate our BUY call, with a higher SGD0.89 TP (from SGD0.82), based on DCF valuation (WACC: 10.0%, terminal growth rate: 5.0%).


Experienced workforce ensures smooth execution. SILV boasts a strong team of experienced software engineers. Management has done a good job in retaining talent, with a low turnover rate - at 10% at the junior engineer level, and 5% among the senior engineers and project manager. This workforce has, thus far, maintained a 100% success rate in delivering and implementing SILV’s solutions on time, smoothly transforming the company’s order backlog into profitability. Moving into 1Q14, the group successfully completed upgrading works for OCBC Singapore and OCBC Malaysia this month, and is expected to complete the Union Bank project by November.

Topping up the orderbook. Although it has been a while since the group won any major contracts, its project backlog remains healthy at around RM300m, or 1.5x of its FY13 project-related revenue. Management shared that it is currently bidding for seven regional contracts, of which: i) two are in the final stages (only two contenders left), and ii) five are in the shortlist (five contenders left). Amongst these bids, the closest is the RHB Bank contract. We remain confident that SILV would be able to secure the job by October.

New business to propel growth. We expect the SILV’s newly acquired insurance software business (Merimen) to contribute significantly from this year onwards and generate about MYR25m (at a gross profit margin of 65%); subsequently the business should grow at 20% per annum. Meanwhile, we also expect its recently acquired mobile and internet banking software solutions provider, Cyber Village, to enhance its existing banking software offerings and broaden its customer base. As such, we expect SILV to grow 15-17% per annum in the next two years, with potentially even higher growth pending orderbook replenishment.


Source/Extract/Excerpts/来源/转贴/摘录: OSKResearch,
Publish date: 29/08/13

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Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
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“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
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每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
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