Silverlake Axis - RHB Invest 2019-06-19: A Solid End To The Year; Keep BUY

SILVERLAKE AXIS LTD (SGX:5CP) | SGinvestors.io SILVERLAKE AXIS LTD (SGX:5CP)

Silverlake Axis - A Solid End To The Year; Keep BUY

  • Maintain BUY on this 2019 sector and country Top Pick, unchanged DCF-backed Target Price of SGD0.65, 18% upside plus 4% FY19F (Jun) yield.
  • With improving fundamentals and strong earnings growth as of 9MFY19, SILVERLAKE AXIS LTD (SGX:5CP) is on track to record a robust FY19. We expect the sturdy growth in earnings and margins to continue into 4QFY19, as it continues to execute the major Malaysian core banking contract.



A positive 4QFY19F.

  • In 3QFY19, Silverlake Axis revenue and PATMI increased 12% and 77% y-o-y, mainly on margins expanding from licensing revenue growth (+98% y-o-y) as it continued to implement the Malaysian contract.
  • We expect this expansion to continue into 2HFY19, which will likely result in a similar growth for 4FYQ19. As such, Silverlake Axis should book a positive 4QFY19F performance, on continued margin and positive PATMI growth.


Potential large order wins from Indonesia and Thailand.

  • As of end-3Q19, its orderbook stood at MYR250, down from MYR280m in 2QFY18. With banks budgeting for more IT investments, especially in Indonesia and Thailand, we understand management is actively in talks with a few potential new and existing customers.
  • Silverlake Axis is also confident of securing additional large-sized contracts by the end of 2019, especially from these countries – which should further contribute towards PATMI growth in FY20-21.


Higher dividend payout ratio in 4QFY19.






Shekhar Jaiswal RHB Securities Research | https://www.rhbinvest.com.sg/ 2019-06-19
SGX Stock Analyst Report BUY MAINTAIN BUY 0.650 SAME 0.650



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