Datasonic - Public issue of 20.4m new shares and offer for sale of 7.9m shares (IPO)

New Listing

• Datasonic Corporation (Datasonic) is principally involved in the provision of ICT solutions including personalisation of smart cards, customisation of software and hardware solutions and etc.
• Going forward, Datasonic plans to:
  1. expand its market share and position penetrating into new sectors;
  2. setting up a new headquarters as a regional personalisation solution to expand capacity; and
  3. enhance and strengthen its technical competencies in the provision of ICT solutions.
• We forecast Datasonic to post FY12-14 earnings CAGR of 27.7% mainly driven by:
  1. contribution from smart card personalisation business for the supply of the new MyKad and the new passport polycarbonate datapage;
  2. demand for its equipment segment for laser engraving personalisation equipment; and
  3. provision of maintenance and enhancement of ICT systems. We have, however, projected FY12-14 earnings CAGR of 23% as we expect margin contraction on rising costs.
• We have pegged a target PER of 7.5x, in line with its peers’ average. Fair value is RM2.13/share.

Source: RHB Research - 14 August 2012