Company Background
Revenue Group Berhad
- Listed on KLSE ace market in July 2018 for RM0.37:
- Revenue and net profit for 2017 is RM25 million and RM7 million respectively. Share price is RM0.37.
- Revenue and net profit for 2019 is RM58 million and RM9 million respectively. Share price is RM0.90.
- Its revenue grew 132%, net profit grew 28%, share price increased 143%
- Products and services:
- Sales of EDC (Electronic Data Capture) Terminals and spare parts [Revenue: RM21 million, 37%].
- Monthly rental/maintenance income of renting and maintaining EDC Terminals [Revenue: RM13 million, 21%]
- Electronic Transaction Processing - net merchant discount rate (Net MDR) or commission earned from processing electronic transaction via the EDC Terminal and e-commerce (Net MDR earned as third party payment processor or master merchant) [Revenue: RM19 million, 34%].
- Solution & Services related to payment infrastructure:- commission earned on digital payment via e-commerce website, phone/utilities bill payment, game credits and etc [Revenue: RM3 million, 6%]
- 99.9% of their business are in Malaysia.
- 4 customers contributes 65% of its total revenue.
- Director remuneration in 2019 is RM2.7 million [Revenue: RM58 million, net profit: RM9 million]
GHL Systems Berhad
- Listed on KLSE in 2003:
- In 2009, its revenue is RM57 million, net loss is RM6 million, share price is RM0.37
- In 2019, its revenue is RM347 million, net profit is RM28 million, share price is RM1.67
- Its revenue grew 508% while profit grew 566%. Share price increased by 352%
- Products and services:
- Transaction payment acquisition such as MyDebit payment, supporting e-wallet payment, internet payment solutions etc [Revenue: RM204 million, 60%]
- Sales or rental of EDC terminals [Revenue: RM131 million, 37%]
- Solution services such as consumer loyalty program, prepaid e wallet solution etc [Revenue: RM11.9 million, 3%]
- Malaysia contributes 78% of their business followed by Philippines 13%, Thailand 8% and others 1%.
- No single customer contributes more than 10% of its revenue.
- Director remuneration in 2019 is RM2.1 million [Revenue: 347 million, net profit: RM27 million]
Financial Backgrounds
- Revenue's operating cash flow is low at RM2 million due to higher settlement on trade payable and increase in trade receivables.
Future Prospect
Revenue Group Berhad
- Expand to Myanmar and Cambodia partner with local financial institution (no company set up in Myanmar and Cambodia yet).
- In March 2019, Revenue acquire 70% in Buymall and 51% in AnyPay which contributes RM300k and RM150k of net profit to Revenue for 6 months.
- For more information on how Buymall and Anypay will compliment Revenue business: https://www.theedgemarkets.com/article/revenue-group-looks-beyond-payment-solutions
- Opportunity to transfer to main board as Revenue has meet the RM20 million PAT requirement (2018 + 2019 + 2020).
GHL System Berhad
- Expand to Indonesia and Cambodia - acquiring 51% into Speed Pay PLC in Cambodia for RM8.4 million in 2019. SpeedPay commence operation and has a net loss of RM1.5 million in 2017.
- PT Pembayaran Elektronik Indonesia partner with Bank of Indonesia in February 2019 on transaction payment acquisition.
Valuation
- Revenue Group Berhad: Average PE for REVENUE is 30. Based on its current EPS of 2.8 sen, at PE30, Revenue fair price should be RM0.84
- GHL System Berhad: Average PE for GHLSYS is 47. Based on its current EPS of 3.19, at PE47, GHYSYS fair price should be RM1.49
* Covid 19 has impacted the business model of REVENUE and GHLSYS significantly as consumers are unable to spend in shopping mall causing earnings from transaction processing segment to drop. Therefore a discount of 20% on fair price should seen reasonable.
No comments:
Post a Comment