STOCK FOCUS OF THE DAY
Prestariang : Core business continues to deliver BUY
We reiterate our BUY recommendation on Prestariang with unchanged forecasts and fair value of RM2.08/share based on a sum-of-parts valuation. Prestariang has received the letter of award from the Ministry of Finance for the supply of Microsoft software licences, products and services under the Master Licensing Agreement 3.0 (MLA 3.0) to all government agencies and Institut Latihan Awam (public training centres) in Malaysia. The contract has a total value of RM222.6mil, and is valid from 1 Feb 2018 to 31 Jan 2021.
The contract is an extension of MLA 2.0, which was first awarded as a three-year contract in Jan 2015, with retrospective effect from 1 Feb 2015 to 31 Jan 2018. We note that the contract included a new customer (Institut Latihan Awam) with new added scope of services. We are keeping our forecasts as the development has already been accounted for. Nonetheless, we are positive on the announcement as the group continues to prove execution capabilities in its core businesses.
At the current price, Prestariang appears undervalued for a solutions provider. The company currently trades at a 1-year forward PE of 12x, while its regional comparables, Chinasoft International and Hexaware Technologies, are both trading at 19x.
Other report
Malaysian Pacific Industries : Hurt by weak USD HOLD
Petronas Chemicals Group : Trading above its upper valuation band HOLD
STOCKS ON RADAR
Serba Dinamik Holdings, Mynews Holdings, Plastrade Technology, Peterlabs Holdings
ECONOMIC REPORT
US — Higher consumer spending at the expense of savings
NEWS HIGHLIGHTS
Stars align for big-cap stocks
Weida founder seeks to take firm private, offers RM2.40 per share
Property market to remain lacklustre in 1H2018, says Knight Frank
SP Setia to raise about RM1bil from placement
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The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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