Advertisement
Singapore markets closed
  • Straits Times Index

    3,224.01
    -27.70 (-0.85%)
     
  • S&P 500

    5,248.49
    +44.91 (+0.86%)
     
  • Dow

    39,760.08
    +477.75 (+1.22%)
     
  • Nasdaq

    16,399.52
    +83.82 (+0.51%)
     
  • Bitcoin USD

    70,461.42
    +466.74 (+0.67%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,965.48
    +33.50 (+0.42%)
     
  • Gold

    2,218.70
    +6.00 (+0.27%)
     
  • Crude Oil

    81.95
    +0.60 (+0.74%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Nikkei

    40,168.07
    -594.66 (-1.46%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • FTSE Bursa Malaysia

    1,530.60
    -7.82 (-0.51%)
     
  • Jakarta Composite Index

    7,288.81
    -21.28 (-0.29%)
     
  • PSE Index

    6,903.53
    +5.36 (+0.08%)
     

Silverlake Axis Ltd - No order book stated: is it facing a revenue hole?

16/7/2015 - Silverlake Axis Ltd, a provider of digital solutions and services to the banking, insurance, payment, retail and logistics industries, expects to pursue business opportunities in North East and South East Asia.

It says these will be driven by consolidation in the banking industry and further investments in digital and mobile banking.

But it did not provide any information about ongoing negotiations or the current status of its order book.

DBS Vickers has downgraded Silverlake Axis from HOLD to FULLY VALUED after lowering its price target from S$1.35 to S$1.08, which is based on 18 times projected FY16 earnings.

It says current valuations of the banking software developer are too rich, at 21 times projected FY16 earnings, even though its growth prospects are promising.

The company announced earnings for Q3 FY15 in May:

Revenue: +5% to RM143.3 mln
Profit: +22% to RM76.6 mln
Cash flow from operations: RM86.5 mln vs RM76.6 mln
Dividend: 1.1 cents per share vs 1 cents per share

The increase in the Group's revenue was due to higher contribution from maintenance and enhancement services and software project services.

This was partially offset by a decrease in revenue contribution from sale of software and hardware products and software licensing.

Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies which global investors need answers to.


Question
Question

1. Did it win any contract for software licensing in 2015?

Software licensing remains a core business of the Group.

But it declined 35% to RM25.6 mln in Q3 and it grew just 3% on a nine month basis.

We ask this question because the Group has not provided information about its order book.

Question
Question

2. How does it benefit from the listing of Global InfoTech in the near term?

Silverlake Axis' associate Global InfoTech Co. Ltd. was listed on ChiNext of the Shenzhen Stock Exchange on May 28 at a listing price of RMB11.26.

Founded in 1998, it is a financial information software products and integrated service provider in China.

It was oversubscribed by 339 times and was trading at around RMB67.5 on July 7.

After listing, Silverlake Axis' stake was diluted from 27% to 20.3%.

Listing definitely provides new funds and raises profile but this may not help the Group to grow in the near-to-medium term.

(Read the full story to get all 5 questions)

We have invited the company to an on-camera interview, and/or to reply to our questions in writing.

At the time of publication we have not received a reply (which is why you are seeing this message).

We will update this report if we do.


Legal notice

While our purpose is to ask the questions which the man on the street would ask, and to help the everyday investor make informed investments, please note that:

Our reports and presentations ('our contents') are not investment advice nor should they be construed as investment advice or any recommendation of any kind; nor meant to cast allegations or insinuations of any kind against any individuals or entities. Before acting on the material in our contents, you should either seek independent advice tailored to your particular circumstances and intentions or rely on your own judgement.

Our reports and presentations express our observations, opinions and theoretical analysis based on the facts that we have gathered or have been provided to us. While we endeavour to ensure that our contents are accurate and are presented in good faith, we cannot and do not warrant the accuracy, adequacy or completeness of the material or that the material is suitable for its intended use; and we disclaim any such warranties express or implied that may be presumed by any party; neither do we take responsibility for the views of companies or other stakeholders or observers or sources quoted or hyperlinked in our contents. While every precaution has been taken in the preparation of our contents, we (and our principals) shall not be liable for any losses or damage or inconveniences due allegedly to errors or omissions in any facts or due allegedly to reliance on our contents in any way whatsoever; nor for any damage to any computer hardware, date information or materials allegedly caused by our contents.

All expressions of opinion and observations in our contents are subject to change without notice and we do not undertake a duty to update and supplement our contents or the information contained herein in the event we obtain any further or more complete information.

©2015 Investor Central® - a service of Hong Bao Media