PRESBHD (5204) : Prestariang - Scoring more good news soon?
Target RM2.94 (Stock Rating: ADD)
At 93% of our forecast when annualised, Prestariang’s 9M14 net profit was below our expectations as well as the market’s due to higher costs incurred in working on potential projects. We cut our FY14 EPS to factor in the higher costs but maintain our FY15-16 numbers. Our target price is unchanged, at 19.2x FY16 P/E, a 20% premium over the target for the sector to reflect a potential earnings boost from its private placement proceeds. We maintain our Add call as newsflow should turn positive, starting with the announcement of a new shareholder for UniMY. Potential catalysts include newsflow on its major project, “IC Citizen” contract extension and a new UniMY shareholder.
9M14 net profit down 41%
9M14 revenue was down 25.3% yoy, mainly due to delays the in IC Citizen contract extension and the end of the Komputer 1 Malaysia project. 9M14 net profit was down a steeper 41% as Prestariang incurred higher operating expenses due to its work on some new projects. A 1 sen interim DPS was declared, in line with our estimate. This takes the YTD DPS to 3.7 sen, which works out to 94% net dividend payout ratio. UniMY’s 3Q14 loss was RM1.6m.
2015 promises to be a better year, staring with UniMY
While 2014 is a year of consolidation for Prestariang, 2015 promises to be a much better year as i) Majlis Amanah Rakyat has proposed to acquire 30% of UniMY. We expect UniMY to at least break even in 2015 (expected loss of RM6.7m in FY14). ii) We believe the company should be getting the IC Citizen contract extension before year-end. iii) Prestariang is also working with the government on the PISA accelerated programme and has already undertaken the pilot project. Newsflow on this could surprise on the upside in 2015. iv) Big data competency centres (BDCC) where Prestariang is the project manager could make some contribution next year. v) The company is working on a major project with long-term recurring income potential. If successful, there should be some positive newsflow soon.
Cash rich balance sheet
Prestariang has RM120m net cash (RM0.25/share). In Jul, the company completed a private placement of 44m shares at RM1.74 apiece. Prestariang will be holding its 3Q14 briefing on Thursday morning.
Source: CIMB Daybreak - 27 November 2014
Target RM2.94 (Stock Rating: ADD)
At 93% of our forecast when annualised, Prestariang’s 9M14 net profit was below our expectations as well as the market’s due to higher costs incurred in working on potential projects. We cut our FY14 EPS to factor in the higher costs but maintain our FY15-16 numbers. Our target price is unchanged, at 19.2x FY16 P/E, a 20% premium over the target for the sector to reflect a potential earnings boost from its private placement proceeds. We maintain our Add call as newsflow should turn positive, starting with the announcement of a new shareholder for UniMY. Potential catalysts include newsflow on its major project, “IC Citizen” contract extension and a new UniMY shareholder.
9M14 net profit down 41%
9M14 revenue was down 25.3% yoy, mainly due to delays the in IC Citizen contract extension and the end of the Komputer 1 Malaysia project. 9M14 net profit was down a steeper 41% as Prestariang incurred higher operating expenses due to its work on some new projects. A 1 sen interim DPS was declared, in line with our estimate. This takes the YTD DPS to 3.7 sen, which works out to 94% net dividend payout ratio. UniMY’s 3Q14 loss was RM1.6m.
2015 promises to be a better year, staring with UniMY
While 2014 is a year of consolidation for Prestariang, 2015 promises to be a much better year as i) Majlis Amanah Rakyat has proposed to acquire 30% of UniMY. We expect UniMY to at least break even in 2015 (expected loss of RM6.7m in FY14). ii) We believe the company should be getting the IC Citizen contract extension before year-end. iii) Prestariang is also working with the government on the PISA accelerated programme and has already undertaken the pilot project. Newsflow on this could surprise on the upside in 2015. iv) Big data competency centres (BDCC) where Prestariang is the project manager could make some contribution next year. v) The company is working on a major project with long-term recurring income potential. If successful, there should be some positive newsflow soon.
Cash rich balance sheet
Prestariang has RM120m net cash (RM0.25/share). In Jul, the company completed a private placement of 44m shares at RM1.74 apiece. Prestariang will be holding its 3Q14 briefing on Thursday morning.
Source: CIMB Daybreak - 27 November 2014
