DATAPRP (8338) - February Focus - Dataprep - The Wild Card
Dataprep Holdings Berhad is a Malaysian based ICT company that had been involving in the trading of IT related products, payment solutions, Enterprise Content Management System and also consultation and deployment on data warehouse and cloud computing infrastructure and services.Back then, Dataprep had limbed into financial difficulties, however, the company was being rescued when Encik Ahmad Rizan took over the helm on 2011 and padded the company with more than RM 100 million in orderbook from government linked entities such as EPF, Tenaga Nasional, Telekom Malaysia and Celcom Axiata Berhad.
While those contracts are just good enough to keep Dataprep alive, major shareholder, Datuk Lim Chee Wah, which is the youngest son of the late Lim Goh Tong definitely have a high fuel package instill for Dataprep.
Let's have a quick glance at Dataprep recent share price performance.
Dataprep Holdings Berhad (Dataprp - 8338) had been consolidating at the support price of the previous trading range of RM 0.245 to RM 0.30 before the equity shake up that is caused by the oil markets. On the 21st August 2014, Dataprep had saw more than 30 million of shares traded, with an almost full solid white candle to support the fact on the heavy accumulation behind the scene.
Recent filings had also shown that Director Muhammad Fauzi Bin Abd Ghani had previously accumulated on Dataprep at the range of RM 0.245 to RM 0.255.
With the current price at RM 0.215, Dataprep will be looking to inch back to it's previous consolidation region at RM 0.245, while a greater volume will be able to charge Dataprep forward towards testing RM 0.30.
Dataprep - Double Wild Card
Dataprep had been appointed as the main ICT and project delivery partner for the mega USD 6 billion (RM 21.7 billion) major international tourism destination in China - Secret Garden Resort which is in the city of Chong Li, Province of Hubei, China. The project is also the brainchild of major shareholder Datuk Lim Chee Wah, who is the principal shareholder for Dataprep and project owner, VXL group.
Dataprep, which will be monitoring all ICT related project, which include hardware to software will be seeing more than 20 projects in phases to be implemented from stage to stage for a period of 10 to 12 years. With the huge project across the line, Dataprep will be appointing vendors to implement the work, and will be taking 6% from the total project value. IT had been estimated that the total value allocated for the ICT related works will be looking to worth around RM 800 million to RM 900 million, putting a good 54 million net income in the pipeline.
The
Genting based Secret Garden Resort had already started its operation
with 5 star Genting Grand Hotel. With the cutting edge facilities and
breathtaking scenery, Secret Garden Resort will be targeting to host the
Winter Olympic in 2022.Dataprep, being one of the project delivery partner in the building and creation of Secret Garden Resort will be looking to see steady flow of recurring income from all the ICT related matters in the resort.
While good thing never comes alone, the second wild card that is in Dataprep hand will be the reformation in card payment system in Malaysia.
With Malaysia heading towards a cashless society, Bank Negara undertook significant reformation in the card payment industry which will remodel the way Malaysian make payments. Amongst the framework including
- Increasing card terminal to 800,000 by 2020 from the current 200,000, in which a portion of them to be wireless and contactless.
- Contactless terminal consist of 30% of all terminals.
- All debit card to be recarded with contactless enabled.
- All card transaction to be using PIN based by 2017.
Bank Negara will be targeting to see an increase of 96,000 terminals a year and will also foresee to see the debit card usage to increase by 10 fold by year 2020.
Based on the target of 800,000 terminal, at the average terminal rental of RM 100 per month will be equivalent to a big sum of RM 80 million of terminal rental's revenue in the industry. While GHLSYS had been the primarily known company in providing terminal, the overlooked Dataprep will not be shy of putting a fierce front in competing with the others competitor for this big chunk of cake that is prepared for them.
While the downstream payment system will see an increase in Terminal, close sources had tipped off the involvement of Dataprep in the upstream system upgrade in banks and financial institution to improvise the system to replace the current signature based to the PIN based verification during the transaction.
Dataprep will be a possible dark horse in 2015, and could be a raging bull in 2016 to 2017. At the current price of RM 0.215, Dataprep will be interesting to be vested in based on:
- Involvement as Core ICT and Project Delivery Partner for Secret Garden Resort in China
- Project implementation cost looking to be value at approx RM 800 - 900 million, in which Dataprep will be netting 6% from the total cost.
- Steady income flow from Secret Garden Resort from maintenance and upgrading contract related to ICT.
- Bank Negara reformation in Payment System, encouraging more terminal usage.
- Terminal rental business revenue worth RM 80 million a month by 2020.
- Dataprep involvement in the security upgrade of the payment system through 55% owned Solsis (M) Sdn Bhd, a MOF registered Bumiputera IT Service provider, partnering NSFOCUS from China.
On a long term outlook, Dataprep could be easily looking to trade towards RM 0.50 once all the puzzle pieces assemble together.
Throw in the wild card? You decide
Bone's short term TP: RM 0.30
Cheers and have a nice day
Regards,
Bone
http://bonescythe.blogspot.com
