June 25, 2024
ADB AGM highlights
E-invoice opportunity / new product initiatives
E-invoice drives accounting software demand; mgmt. is hopeful that spillover effect to be felt across entire software suites – fact ignored by investors largely
ADB leverages on its material accounting software market share to cross-sell its other product offering, aggressively (via discounts/promo)
A new product is ~90% ready to cater for micro size businesses
Recurring income
Recurring income contributes ~20% revenue or ~60% profit
Recurring income and growth profile underestimated by market e.g., software user increase from same client co.
Cloud experiencing robust growth rate
On-prime to cloud transition is unlikely as both caters to different clientele/purpose.
Margins / Op. leverage
Cloud software to experience material margin expansion as subscription base increases i.e., high op. leverage
Grant affected GPM in recent quarter because of accounting recognition timing difference; outsource expenditure (software design fees) paid whereas sales registers gradually over ~2-years i.e., GPM improves going forward
Cost conscious mgmt.
Challenges
Skilled manpower
Regional market expansion – ADB attempts to maintain 100% ownership
Would consider M&A provided price is right; aim is to expand client base and less for software ability
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