Thursday, August 29, 2013

Silverlake Axis : Investment merits intact! (CIMB)

Silverlake Axis
Current S$0.75
Target S$0.86
Investment merits intact!

 Although FY13 sales were 7% below our forecast due to lower hardware sales,core EPS was in line (99%), as gross margins widened to 64%(previously 54.4%)The improvement was led by higher contributions from software licensing and recurrent maintenance revenue.

We cut FY14-15 EPS by 1% to factor in dilution from new shares placed out recently but maintain our DCF target price (WACC 7.8%) and Outperform rating. Catalysts are expected from new orders and a possible listing of its associate. We introduce FY16 forecasts.


Updates
In Jul, its recently-acquired CVSB announced a contract from Bank Rakyat, the biggest Islamic cooperative bank in Malaysia, to implement a new Internet banking system. Under the contract, CVSB will supply, install, integrate, test, implement and commission hardware, software and services for Bank Rakyat’s new Internet banking system. In addition, CVSB will provide maintenance services for five years.

What will move the needle?
In FY13, Silverlake announced three new contracts and one contract expansion totalling RM135m. Another two were also announced, though their value was not disclosed. Recognition of these contracts should boost its FY14/15 results. Apart from substantial order wins and acquisitions, another potential catalyst for its share price is possibly a listing of its Chinese associate at attractive valuations.

Maintain Outperform
Strong free cash flows continue to underpin its dividend payouts. FY13 payout was 86% with the company remaining in a net-cash position. Our FY14-16 payout assumptions are 70%. Stay invested.




Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date: 28/08/13

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Warren E. Buffett(沃伦•巴菲特)
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别人贪婪时我恐惧, 别人恐惧时我贪婪
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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


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冷眼(冯时能)投资概念
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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。
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1.有智慧,不如趁势
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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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