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Syariah Status: NO

Market Listing: Ace

Expected Target Price: 0.20/0.25 short to mid term 0.30 Long term

Short to mid term: 1-3 months

Long term: 6-12 months

Company Background

TFP Solutions Bhd is a provider of Business Productivity Solutions and Services for Business Enterprises.
The company operates under two business solutions namely Business Management Solutions and Converged Infrastructure Solutions.

Latest Development

1. Ace-market listed technology solutions provider TFP Solutions Bhd is seeking to turn around its fortunes with the entry of a new managing director last July. Under the new leadership, it aims to stay lean and mean by venturing into new markets.

2. New MD Datuk Hussian Abdul Rahman, 57 who is already a major shareholder also owns MobilityOne Ltd in which TFP also part of the shareholder of MobilityOne Ltd.

3. MobilityOne and TFP are going into new business by providing fintech solution whcih is e-wallet, remittance and content aggregation.

4. TFP Solutions already provides backend software solution support to many big e-walletplayers in the domestic market, so it sees an easy and seamless transition into the larger e-wallet gameplay.

5. MobilityOne is involved in similar businesses as the potential to grow the business will be something investors will be looking forward to.

6. TFP plans to focus on the underserved foreign workers cashless transaction potential, combining it with the company’s capabilities in human capital management services. The company says it is ready tolaunch its e-wallet service within a couple of months.

7. TFP is confident that they will be able to compete with the big players in the e-wallet segment because they are looking at an untapped segment of  the cash transaction market – foreign workers and the rural population. TFP Solutions to target over two million Bangladeshi workers who would welcome better and more convenient ways to transfer money back to their home country.

8. TFP Solutions provides human resource payroll solutions as enterprise resource planning (ERP) to clients that include large multinational companies as TFP sees this as an opportunity to better integratethe payroll solutions to its companies and at the same time offer remittance services to the foreign workers using fintech.

Turnaround Story

1. The company has been making losses for the last three financial years. Losses before tax in 2018 widened to RM2.067 mil from RM0.820 mil the previous year. The company attributes the losses mainly to the weaker ringgit and increased cost of equipment. It also faced declining profit margins in its IT hardware business segment.

2. TFP is focusing on the turnaround by venturing into fintech as mentioned earlier in which areas they are focusing to tap into.

3. TFP Solutions is an SAP silver partner providing comprehensive SAP Business One solutions under its subsidiary SBOne Solutions Sdn Bhd.

4. TFP plans to penetrate the halal industry later this year in which could add to its earnings potential.

5. TFP  have been in talks with some of the major players in the telecommuncation industry as they hold a mobile virtual network operator (MVNO) licence which enables them to provide internet services.

6. TFP won shareholders’ approval at its recent EGM to dispose of its lossmaking subsidiary, Tech3 Solutions Sdn Bhd, for RM7.9 mil cash. The proceeds will help finance TFP Solutions’ investment in the online business and the e-wallet system.

7. Tapping into MobilityOne's e-payment businesses in the region can help draw investor interest again in this thinly traded counter.

Technical Analysis

TFP is poised for a breakout in which the resistance is at 0.13 which also means the stock will break it's downtrend line.

MACD histogram is above 0 as this is a sign of a bullish trend.

RSI is slightly above 70% but this doesn't mean the stock is overbought because this is a company which has a small market cap and any slight movement tends to move the RSI quite quickly.

DISCLAIMER: The information above is just the author's opinion and has no obligation if any decision made by anyone.

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