Good morning.
Today, we feature a note on Elsoft Research Berhad in our FundTech Radar – 9th Oct 2018. Elsoft is principally involved in research, design and development of test and burn-in systems and application specific embedded systems. In FY17, Elsoft’s sales were made up of 83% local sales vs. 17% oversea sales.
Fundamental Stance
· A strong 3-year (FYE15-17) revenue and core PATAMI CAGR of 12.5% and 14% respectively.
· Its FY17 PATAMI margin was 46.4%.
· Net cash position of RM60.3m (21.8 sen per share) as at 30 Jun 2018.
· Consistent dividend payment since FY05. Current dividend yield of about 2.4% with div. payout ratio of 74.2%.
· Expected to end FY18 with record high shipments of test equipment that will impact positively its revenue and profit.
· Expected its customers in China to shift the production of their LED components to Malaysia.
· Currently trading at 23.8x 12-month trailing P/E (22.2x if excludes 21.8 sen net cash per share), a 13.2% discount compared to its peers.
Technical Front
Prices may take a breather in the near term before resumption of uptrend takes place.
Resistances: 3.53/3.73/4.16
Supports: 2.92/2.74/2.25
The above information is extracted from CIMB Research Report. For the full research reports, outlook and disclaimers, please logon to your account on www.itradecimb.com.my and click on <Research> Tab under Malaysia.
This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.
9th Oct 2018
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