We raise our TP for Elsoft to RM3.75/share upon raising our PE multiple to
25.0x (from 22.0x previously). This is premised on prospects of the group
potentially benefitting from growing interest by manufacturers to set up
operations in countries like Malaysia following the escalation in trade tensions
between the USA and China. Apart from this, we continue to like Elsoft for
its research and development capabilities, relevant product offerings, rich
margins and robust balance sheet. Reiterate Buy. Key risks include single
customer/product risk and lack of recurring business.