• GHL announced its collaborations with Sabuy Technology Company Limited (Sabuy Technology) on 2 Apr 2021 to offer value-added services which will benefit both companies located in Thailand.

• We are positive on the announcement and foresee a greater opportunity for GHL to expand its transaction payment acquisition (TPA) business in Thailand amid intense competition with local banks as the government continues to promote initiatives to adopt cashless payment.

• Maintain BUY at a DCF-derived TP of RM2.15 TP, implying 2021/2022F PE of 58x/37x. We believe GHL’s strong presence regionally, which offers wide range of services, sets the company as the best partner for financial technology companies or payment providers to grow their businesses and tap into the digital payment revolution.

Collaboration with Sabuy Technology, Thailand

On 2 Apr 2021, GHL announced its collaborations with Sabuy Technology Company Limited (Sabuy Technology) to offer value-added services; Sabuy Money’s e-wallet payment and other e-wallet partners (TrueMoney, Dolfin, Rabbit LINE Pay, ShopeePay and Alipay), Sabuy Cash’s loyalty system, Sabuy Exchange’s reward system and Termsabuy Plus top up services which benefiting both merchant-based in Thailand. Through the collaboration, 1) GHL is able to offer wider services offering across its selected merchants and tap into new customer segments over the installation of its Smart Android EDC terminal at Sabuy point-of sales (POS) (SABUY POS), and 2) Sabuy Technology can expand its services offering to more than 10,000 of GHL’s touchpoints across diverse businesses i.e. food & beverage, telecommunication, retail, beauty & spa and etc.

Another earnings growth potential unlocked

We are positive over the announcement and foresee greater opportunity for GHL to expand its transaction payment acquisition (TPA) business in Thailand. To recap, Thailand’s e-payment industry has always posed a big challenge for GHL given intense competition with local banks as the government continues to promote initiatives to adopt cashless payment in the country.

Maintain BUY with TP of RM2.15

Maintain BUY with a DCF-derived TP of RM2.15 (WACC: 9%, terminal growth rate: 3%), implying 2021/2022F PE of 58x/37x. We believe this is fair given GHL’s strong presence regionally with over 146,200 TPA touchpoints which offer wide range of services (Figure 1). GHL is well positioned to be the best partner for financial technology companies or payment providers to tap into digital payment ecosystem in ASEAN.

Source: BIMB Securities Research - 5 Apr 2021