Highlights
KLSE : SCICOM       SCICOM (MSC) BHD
Last Price Today's Change   Day's Range   Trading Volume
2.10   0.00 (0.00%)  2.10 - 2.10  2,000
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Overview

Avg Volume (4 weeks):130,894
4 Weeks Range:2.08 - 2.25
52 Weeks Range:1.77 - 2.45
Average Price Target:1.88
Price Target Upside/Downside:-0.22
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  6 people like this.
 
mocics Told you there will be no bonus. Strong run this year, have to expect some profit taking along the way. Encourage to see strong accumulation @ 2.24 - waiting to see the next leg up.

Results is good as expected +30% yoy. Dividend also no surprise @ 2 sen. Hopefully can see 2.5 sen for the next 2Q and 9 sen for the full year.
26/02/2016 08:29
nekosan haha back to starting price 2.2
26/02/2016 15:14
scaramooch better they give bonus. improve liquidity. but if leave too much cash may not be good. organic grow very good…..when they buy or do oversea start up…record is…. ah …chooo…i bet …bonus...
27/02/2016 00:00
nekosan haha no share bonus issued, but bonus to buy cheaper now got
29/02/2016 09:37
cch1975 SCICOM (SCIC) is a unique BPO (Business Process Outsourcing) play in Malaysia. SCIC was founded in 1997 and has not made any loss since inception. Listed in Bursa Malaysia in 2005. One of its uniqueness is its ability to offer a multinational/multi-language work force to meet the needs of its diverse client base (multi country, multi industry). From its BPO base, the company is now diversifying into CRM consulting, technology services and E-government (“digitizing of government systems”) businesses. Currently, BPO accounts for 60-65% of SCIC’s revenue and E-Government accounts for 35%. SCIC’s business strategy is to shift more towards E-Government business, which offers stronger growth potential. E-government offers (1) longer contract duration of >10 years (vs BPO’s 1-2 years), (2) stronger growth prospects of 20-30% Y-Y (vs BPO’s 5-10%) and (3) higher margins of 20% (vs BPO’s 10%).

BPO business(60-65% of its revenue):

Exposed to diversified business segments(45 corporate clients/30 languages/18 industry verticals). There is no dominant sector among SCIC’s client base. The contribution from their biggest client does not exceed more than 15% of their BPO revenue.

Customer names includes SingTel, McDonald’s, Air Asia, Lenovo, Huawei, BMW, TESCO, PEPSI, Fujitsu, etc….

SCIC’s positioning is between India’s BPO(more consulting/software) and Philippine’s BPO(basic jobs like call centers, etc). SCIC’s cost is higher than one in Philippine, But SCIC can offer regional support to MNCs using Malaysia’s young and multi-national labor forces with relatively cheap costs. China’s Huawei is one of SCIC’s customers and required for regional supports from SCIC. They don’t go to Philippine/India BPOs due to limited capabilities(languages, etc.).

E-Government business (35% of its revenue):

SCIC provides the backend engine for EMGS, a wholly owned subsidiary of the Malaysian Ministry of Education. All foreign students seeking to study in Malaysia are required to apply for a student visa via the EMGS portal.

EMGS provides a one-stop visa center for foreign students. EMGS’s prospects are good as more and more foreign university branch campuses are set up in Malaysia(i.e. Iskandar).

In 2014, 54,728 applications were submitted through EMGS, Malaysia government targets 200,000 foreign students by 2020. The fee for EMGS is MYR2000/transaction.

Currently, SCIC’s E-Government customers are EMGS and Cambodia government (for digitization of Cambodia government’s system for agricultural exports).

Outlook. SCIC believes there are opportunities on EMGS data that it can capitalise on. Thus it is looking into solutions to help students including an e-commerce student store to help set up bank accounts, medical and obtaining prepaid cards. In 2014, there were 52,478 visa applications and 20,000 renewals, applications are 87% higher than in 2013. Potential earnings driver for the EMGS contract could be the influx of foreign university branch campuses such as University of Nottingham, University of Newcastle, and University of Reading , Xiamen University etc. as well as boarding schools such as Alice Smith, Epsom College, Kolej Tunku Jaafar which would be a big attraction for students from developing countries. The government would continue to take initiatives to increase the number of schools and students as education remains a crucial component under ETP to transform Malaysia into a high-income nation. With the ringgit depreciation, education in Malaysia is also relatively cheaper compared to other countries.

Valuation. SCIC is positioning itself in a niche market as a government e-service provider and this market has high barriers to entry as many competitors offer only consulting expertise but lack the technical and implementation capabilities. SCIC trades at 16x PE vs. MYEG at 20x PE, Datasonic at 23x and Prestariang at 22x PE.

At 20x PE, SCIC is fair valued at RM2.80.
15/03/2016 15:32
mocics Which broker came out with this research? or is it your own?
16/03/2016 08:00
Piggybank 2.80! Wow
16/03/2016 09:21
cch1975 Mocics any new development recently?
16/03/2016 19:56
mocics Not that I know off..except one foreign broker came out with a non-rated report - sounded pretty positive. No TP per se though.
16/03/2016 21:45
Piggybank Not bad. Foreign broker covering Scicom. More to come
16/03/2016 21:48
Piggybank Scicom started as a BPO company but has morphed into a
significant e-government service player by being the sole agent to
the MoE in processing foreign student visas. According to the
company, it processed an estimated 66k applications in 2015.
● In 2016, Scicom said it will venture into e-commerce through “estore”
by cross-selling products/services to foreign students. It will
get a cut from every sale and company expects the monetisation
of foreign student database to yield strong positive results.
Malaysia’s e-commerce market in 2010-14 grew at a 34% CAGR.
● Net margins have been on an upward trajectory due to its egovernment
business. NP was +56% YoY in FY14 and +50% in
FY15. Consensus expects 22% EPS growth in FY16. In 1H16,
Scicom’s EPS was +34% YoY and management expects a stronger
2H with new BPO contracts that it has recently signed on.
● Due to its asset-light business model, Scicom generates ROEs of
40-45%. Based on consensus, it trades at 19.0x FY16 P/E, offers
a 3.5% dividend yield and is in a net cash position.
Scicom prides itself on being more than just a call centre
Scicom (Mkt cap: US$196 mn, 3M average daily value: US$0.3 mn)
began operations in 1997 (listed in 2005) as a business process
outsourcing (BPO) company. The competitive advantage it has over
customer contact hubs, such as India and the Philippines, is its
domain knowledge across vast industries and multilingual staff (30
languages). According to the company, it has served/is serving big
corporate clients like Nokia, Singtel, McDonald's, AirAsia, HP, Pepsi,
etc, typically under long-term contracts. Currently, it has 45 corporate
clients and is not overly dependent on any single one; >70% of
revenues are derived overseas. Scicom prides itself on being more
than just a call centre but instead, a "mini Accenture" providing
consulting and technology services, as 92% of its staff are qualified
graduates. As the business model is replicable across industries and
countries, it is continuously looking to expand its client base.
Government contract provides concession-type income
In recent years, Scicom has managed to break into a new business
segment, dubbed "e-government". The Education Malaysia Global
Services (EMGS) contract was awarded by the Ministry of Education
(MoE) in 2013 and involves Scicom providing the backend engine which processes all foreign student visa applications in Malaysia. We
understand from management that it is a 10-year cost-plus
concession. In 2014, Scicom processed 55k visa applications (+87%
YoY) and this grew an estimated 20% to 66k in 2015. Management is
upbeat on growth prospects, as the education sector in Malaysia is
one of the key thrusts of the Economic Transformation Programme
(ETP) and measures are being taken to push foreign student
enrolment to 200k by end-2020. Malaysia has ~618 higher learning
institutions (including colleges, universities and polytechnics).
Breaking into e-commerce in 2016
In 2016, Scicom will launch “e-store” which entails cross-selling
products/services to foreign students. According to management, it
will tie up with 1-2 telco service providers, banks and another 50-plus
companies (including cinemas, F&B, retail, etc.) and Scicom will get a
cut from every sale of product/service. Management expects the
monetisation of the database to yield large positive results. To put this
into perspective, Malaysia’s e-commerce market saw a 34% CAGR
between 2010 and 2014. According to 11street and iPay88,
Malaysia’s online transactions per capita doubled year on year in
2015.
Net profit grew at a 27% CAGR between FY11 and FY15
Scicom's FY11-15 net profit experienced a 27% CAGR (June yearend).
In FY14, NP was +56% YoY and in FY15 +50%. Net margins
have been on an upward trajectory and the boost in FY14 was due to
the maiden contribution from its e-government business. About 45%
of profits are derived from BPO and the remainder from government
contracts. Consensus expects 22% EPS growth in FY16. In 1H16,
Scicom's net profit was +34% YoY and management is guiding for a
stronger 2H with the new BPO contracts that it has recently signed on.
The group is in a net cash position and has consistently paid
dividends (77% payout in FY15). The asset-light business model also
gives rise to high ROEs in the range of 40-45%.
Based on consensus, the stock is trading at P/Es of 19.0x in FY16
and 16.3x in FY17, and offers a 3.5% yield. Similar companies such
as MyEG and Prestariang, which also operate e-government services
in the country, trade at 26.9x and 25.0x FY16 P/E, respectively.
17/03/2016 10:16
mocics Cheaper to buy Scicom - at that valuation stock will be over RM3!!!!
17/03/2016 12:32
scaramooch on on !!!!!!!!
18/03/2016 07:55
cch1975 Mocics look like foreign fresh fund is coming in from overseas. Usually afternoon only move. Maybe due to time zone different?
18/03/2016 10:27
mocics I heard the management met with over 15-20 fund managers and analysts this morning, must be really good response and great presentation by the CEO?
18/03/2016 15:37
scaramooch our man leo…... great job!!!!! billion ringgit company by year end i think..
19/03/2016 09:51
peterwayne Its been supported by big sharks
23/03/2016 11:04
cch1975 Heard big wave next week?
24/03/2016 15:54
mocics waves? Tsunami???
24/03/2016 17:42
Lee Kian Hoo what wave?
24/03/2016 19:48
scaramooch sharks??? don't follow ……..
25/03/2016 13:14
cch1975 After met up with fund managers. The share prices start dropping.
29/03/2016 19:45
scaramooch may be not so great presentation mocics.????
30/03/2016 11:49
Lee Kian Hoo http://www.bursamalaysia.com/market/listed-companies/company-announcements/5053217
08/04/2016 20:06
RosmahMansur why jatuh alot today?
13/04/2016 11:34
RainT Anyone can guess why scicom drop a lot today ?
13/04/2016 19:49
Lee Kian Hoo oversold
13/04/2016 21:03
sperryw77 Knew Scicom since price tag at 0.70. Hahahah
14/04/2016 11:44
DJDJ MR KRISHNAN bought 200,000 shares yesterday @ RM 2.259
14/04/2016 17:32
traderman tp 3.0
15/04/2016 08:01
cch1975 Directors bought again.
15/04/2016 19:23
cch1975 Libra Invest focuses on stock picks

TheStar Sat, Apr 16, 2016



ASIAN stocks may have rebounded from their worst start of the year, but that is not because of turnaround in the global economy.

The rebound is because of the Federal Reserve’s dovish stand on the US interest rate hike that spurred investors to search for yield outside of the US.

Libra Invest Bhd chief executive officer Jason Lee (pic) reckons that the market would continue to be influenced by any decision by the Fed.

“Any indication for an earlier-than-expected rate hike could heighten volatility again,” he tells StarBizWeek.

“Should this scenario play out, we expect to see a decline in oil prices due to the negative correlation between US dollar appreciation and oil prices,” he says.

Despite his views on the Fed’s influences on market movements, Lee says Libra’s investment strategy is not just chasing the sectors but to focus on stock-selection strategies.

“Our investment strategy is more of a bottom-up approach and tries to identify companies with resilient growth and strong balance sheet to weather the volatility,” he says.

He says the investment firm concentrate on not more than 15 stocks at a time and prefers to avoid companies that are highly geared in the current market.

“We were relatively cautious at the end of 2015 with cash holdings of over 40%. However, we have been deploying the cash since February,” he says.

Libra Invest oversees about RM5.7bil fund. The firm mainly invest in fixed income and equities. About 35% of the fund are allocated for overseas investment.

Lee says that although most of the fund allocation is on fixed income instruments, equities are the main kicker.

“The volatility in the equity market for the last six to nine months had put off some investors, but for us, it is all back to the fundamentals,” he says.

Among his main focus in stock-picking is the company’s management team, particularly in terms of the management’s strategies and outlook.

“Once you believe in the management vision, you will need to wait for the execution part. We are trying to push through a long-term value investing strategy. We get to know the companies very well, so that we don’t see the need to invest in 40 companies or more,” he says.

Although there are still deflationary pressures and economic recovery is sluggish in the developed economies, growth in the Asean countries are bolstered by infrastructure development projects and consumer growth is still robust.

“The Asia ex-Japan market looks attractive after underperforming developed market peers in recent years. Particularly Asean ex-Singapore is among the fastest-growing and most dynamic regions in the world,” Lee says.

Lee says he prefers consumer-related stocks in countries like the Philippines and Indonesia.

“Even though their valuation are higher than Malaysia, gross domestic product (GDP) growth in the Philippines and Indonesia are higher than Malaysia, at above 5%,” he says.

“Most Asean economies are dominated by domestic consumption. But what makes the Philippines stands out is its resilient economy. The country is expected to report the strongest growth this year due to its resilient business-process-outsourcing industry and foreign workers remittances as well as its low dependence on exports.

“The other major Asean countries are export-driven and highly leveraged to global trade,” he adds.

On Lee’s view on Malaysia, he reckons that the valuation is “neither cheap nor expensive, just a lack of catalysts”.

He says the overall consumer sentiments are expected to remain weak from the high cost of living due to subsidies rationalisation, the weak local currency that hurts imports and the rise in unemployment.

“However, pockets of opportunities persist especially in sectors that benefit from higher infrastructure spending and companies that offer relatively high dividend yield and resilient earnings,” he says.

Lee says one counter that he particularly likes on Bursa Malaysia is Scicom (MSC) Bhd because of its unique business structure.

“This company has evolved from a pure business process outsourcing (BPO) company into a business solutions provider. It has one of the most unique BPO business structure in the region, particularly its multi-national staff force.

“This uniqueness becomes a need in a globalised world. In addition, as the business model is replicable across industries and countries, it is continuously looking to expand its client base overseas as well,” he elaborates.

“We are negative on telecommunications and banks as they are going through some structural changes.”

Lee says volatility in the stock market and ringgit is mainly driven by crude oil prices.

“While crude oil prices are finding its floor and stabilising around US$30-US$40 a barrel, the market begins to realise that the ringgit has dropped too much too fast,” he says.

“But we believed the ringgit would not strengthen any higher from it’s current level, especially if the US eco
17/04/2016 16:14
Chia Seng Soong This company has been performing since in YR 2010. The Company has solid financial position and ROE has been more than 20% since YR 2010. I believe in those companies which have strong cash flow and good ROE, their share prices will be performing if we were to hold their shares for long term despite of the daily market fluctuation. Market weak , it only signals us to buy in more~
18/04/2016 19:13
cch1975 Mocics and piggybank any update recently? So quiet?
22/04/2016 19:35
mocics Results expect to be announced towards end of the month, should be strong. Time to load up before results??
05/05/2016 16:42
shazza Hi people, hope you managed to take profit at Scicoms peak. I am quiet mostly, volatility so high. but miss scicom eventhough can be pretty slow but steady mostly.
11/05/2016 17:12
mocics Hoping for 2.5 sen in dividend this quarter...
14/05/2016 11:20
mocics A break out trade in the making...results due next week - this quarter should see net income of over RM12m????
19/05/2016 18:07
stockist Mocics, don't dream. I heard its less than that.
19/05/2016 20:56
mocics I am an eternal optimist - if not for a RM1.36m exchange loss, they would be close to RM12m net...Good news is that cash level has increased to RM36.6m (from RM24m) - of course this is before the 2 sen dividend payment to be ex on 3rd June and payable on 21st June.

Still think this company can go very far in the long run...
27/05/2016 07:45
mocics That is 2 sen per quarter...8 sens per year. Hoping for 9 sens this year..Have to wait for final quarter to see if possible or not.
27/05/2016 16:16
stockist Agreed mocics.
27/05/2016 21:50
mocics I never a believer of bonus issue as it changes nothing. Liquidity comes with price, when you buy the stock up to 2.50, there will surely be plenty of liquidity.

Pardon my ignorance, what is Revenue Reserve? Do you mean retained earnings?
04/06/2016 07:10
DJDJ Self note: EPF buying, director buying.
13/07/2016 10:05
mocics and EPF still buying...
20/07/2016 08:51
scaramooch all soo quiet…..
04/08/2016 12:49
dylon Any update? Keep dropping
22/08/2016 13:06
Eric Fong RM1++ value of stock fry until RM2 and above...one day sure will adjust back
24/08/2016 00:22
gankm Bravo, profit up & dividend increase to 3 cents..
26/08/2016 17:26
Rica7894 <Scicom> The Malaysia's largest outsourcing company, to benefit from the growing global business process outsourcing (BPO) market.
28/08/2016 10:08


 

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