• A dominant player with 85% market share of ESM. OPENSYS' is mainly involved in developing and providing powerful application software for the banks and insurance companies that enhances the productivity of their tellers, agents and intermediaries. Its proven software expedites the processing of insurance policies and claims as well as cheque and credit card bill payments, enabling financial institutions to offer a wider array of products and services to customers.
• OPENSYS also pioneered the design and development of a class of non-cash dispensing self-service kiosks called Efficient Service Machines (ESM) that accept deposits and payments using cash, cheques, credit and debit cards. ESMs allow banks, insurance and utility companies and government agencies to improve customer service, extend market reach and reduce operational cost.
• On top of it, OPENSYS provides business process outsourcing, managed services and life-cycle maintenance services for a complete end-to-end solution that fulfils the ESM concept of efficient services.

• Poised for a downtrend line breakout. With prices holding decisively above daily lower Bollinger band, 100-d & 200-d SMAs, short term support trendline coupled with gradual uptick in daily slow stochastic, OPENSYS appears to be at the tail end of its ascending triangle consolidation pattern to launch a breakout soon. A decisive breach above RM0.305 (downtrend line and 23.6% FR) is likely to spur prices higher towards the RM0.315 (R1) and RM0.345 (52-week high), before reaching our long term objective of RM0.365 levels.
• Key supports are RM0.285 (200-d SMA) and RM0.27 (61.8% FR). Cut loss at RM0.265.
• Attractive risk to reward ratio with 23.7% upside against 10.2% downside. At RM0.295, OPENSYS’ valuation is undemanding at 2x P/B (about 28% lower than its peers), supported by strong netcash of RM16m or 5sen per share (end Sep 15) coupled with decent dividend yield of 3.3%. All in, we see a good risk to reward ratio for investor with a theoretical entry price of RM0.295 given that the downside to the cut loss zone of RM0.265 is 3 sen (-10.2%) while the upside to the LT target of RM0.365 is 7 sen (+23.7%).

Source: Hong Leong Investment Bank Research - 13 Jan 2016