PRESBHD (5204) - RHB Research upgrades Prestariang to Buy, positive on outlook
KUALA LUMPUR: RHB Research has upgraded Prestariang to a Buy from Neutral with a target price of RM2.21 based on a 20 times CY15 P/E.
In a note on Monday, the research house said the Ministry of Finance has appointed Prestariang as the sole supplier of Microsoft software to all government agencies in Malaysia.
"With this contract in its bag, we expect Prestariang’s core earnings to break the RM50mil threshold in FY15, putting an end to a disappointing FY14.
"We believe the worst is over for Prestariang as we now expect 2015 to be a record year," it said.
It said the contract is of three years tenure starting from Feb 2015.
Historically, the procurement of Microsoft solutions for the public sector was implemented via Prestariang and six other private companies.
With the award of this contract, Prestariang will be the sole supplier of Microsoft solutions to the public sector, it noted.
The research house added that this contract could potentially bring in RM150mil-RM200mil revenue per annum based on the combined income of the seven companies involved previously.
"We are taking a more conservative stance by factoring in topline contribution of RM70mil per annum for FY15-16F in view of the Government’s increasingly cautionary approach towards reducing spending amidst current low crude oil prices," it said.
http://www.thestar.com.my
KUALA LUMPUR: RHB Research has upgraded Prestariang to a Buy from Neutral with a target price of RM2.21 based on a 20 times CY15 P/E.
In a note on Monday, the research house said the Ministry of Finance has appointed Prestariang as the sole supplier of Microsoft software to all government agencies in Malaysia.
"With this contract in its bag, we expect Prestariang’s core earnings to break the RM50mil threshold in FY15, putting an end to a disappointing FY14.
"We believe the worst is over for Prestariang as we now expect 2015 to be a record year," it said.
It said the contract is of three years tenure starting from Feb 2015.
Historically, the procurement of Microsoft solutions for the public sector was implemented via Prestariang and six other private companies.
With the award of this contract, Prestariang will be the sole supplier of Microsoft solutions to the public sector, it noted.
The research house added that this contract could potentially bring in RM150mil-RM200mil revenue per annum based on the combined income of the seven companies involved previously.
"We are taking a more conservative stance by factoring in topline contribution of RM70mil per annum for FY15-16F in view of the Government’s increasingly cautionary approach towards reducing spending amidst current low crude oil prices," it said.
http://www.thestar.com.my
