• Overview. 2Q19 core earnings surged yoy on strong growth in shared services as Paysys contribution began contributing to earnings from this quarter.
• Key highlights. Core earnings fell qoq on slower contribution from Thailand market on lower hardware sales coupled with increase in depreciation and adjustment for EI.
• Against estimates: Inline. While 1H19 revenue was inline with our expectations, core earnings trailed, at only 30%, and consensus at 36%. The shortfall was due to higher-than-expected operating expenses and effective tax rate. We look to revisit our assumptions pending a management results briefing.
• Outlook. Despite earnings coming below our estimates, we remain positive over its long-term business prospects amidst governments’ support towards cashless payment throughout the region. 
• Our call. Our earnings, TP and recommendation are currently under review pending updates from the upcoming results briefing.

Source: BIMB Securities Research - 30 Aug 2019