• Following Apple’s announcement on the availability of its payment services; Apple Pay in Malaysia on 9th August 2022 for Visa and Mastercard cards users, GHL has swiftly responded that all its merchants’ terminals in Malaysia are able to accept the Apple Pay, without extra charges, additional integration or programming required.

• While we are positive on the news following another GHL’s business expansion through more payment options for users, there will be no change to our earnings estimates as Apple Pay will only replace the current usage of physical debit/credit cards with mobile payment and therefore, offering a new payment experience.

• Following the sharp decline in GHL’s share price, we upgrade the stock to a BUY from a HOLD with an unchanged TP of RM1.30, pegged at 57x PER to 2022 EPS of 2.3 sen.

Apple Pay is now in Malaysia

Apple announced on 9th August that its payment services; Apply Pay is now available in Malaysia and users can make payments with their iPhone, Apple Watch, iPad, and Mac for easier, safer, and secure payment options. In addition, the service will be available for users with Visa and Mastercard cards from banks including Maybank, AmBank, and Standard Chartered. This will be available for American Express cards later this year.

GHL Enabling Apple Pay to All Its Merchants

Following Apple’s announcement over this, GHL has responded that all its merchants’ terminals in Malaysia are able to accept Apple Pay, without extra charges or additional integration or programming required. Note that GHL has over 271k payment points in Malaysia as of 1Q22.

Positive on the News, Yet No Change to Earnings Estimate

While we are positive on the news following GHL’s business expansion through offering more payment options for users, we make no change to earnings estimate as Apple Pay would only replace the current usage of physical debit/credit cards with mobile payment and this only offers a new payment experience.

Weaker Consumer Spending to Pose Downside Risk

Despite growing cashless transaction volume to benefit GHL given a change in consumers’ behaviour, together with GHL’s large merchants’ footprint based (over 413k regionally), various e-payment options and products offering, we foresee a slower consumer spending amid inflationary environment where this may pose a downside risk to GHL’s overall transaction volume.

Upgrade to BUY on GHL at a TP of RM1.30

Following the sharp decline in GHL’s share price since our last report (27 May 2022), we upgrade our call on GHL to a BUY from a HOLD with an unchanged TP of RM1.30, pegged at 57x PER of 2022 EPS of 2.3 sen.

Source: BIMB Securities Research - 10 Aug 2022