Of course it is good in long term provided you plan to hold on this stock for long term. Opensys is trying to diversify (or broaden) its activities not just in ATM machines but also into solar industry. We would expect more and more recurring income coming into the book. However, given current volatile and uncertain market condition, don't expect this will cheer the interest anytime sooner.
Guys n gals...just give u a rough idea. Opensys sales still come mainly from its CRM / ATM machines replacement / upgrading from banks. this segment contributes 50% of its revenue while 30% from recurring income from business outsourcing n cheque processing and 20% from maintenance services. Just assume an annual sales of RM100mil with PAT margin of 10% (or RM10 mil) Let's focus on CRM/ATM. We have about 15,000 ATM/CRM, and 5,000 CRM had been replaced by Opensys. Potentially another 8,000 CRM to be replaced by Opensys (assume 80% market share). Given potential value of RM60,000 per unit, it will translate into sales of RM480mil or about 5-year sales ! Les't further assume its takes 5 years to fully replace the CRM, then you will expect OpenSys will general RM10mil per year for next 5 years under this segment alone ! This segment alone already almost equal to its latest full year results. Assuming other segments generate RM5 mil per year (which is very conservative and assume no growth), we would expect Opensyste PAT to hit RM15mil per year or at least 50% from current RM10mil level. This exclude the solar system. It is a unit business segment where it connects all stackholder together, i.e. from user to suppliers and financier. (nobody does it so far). It consolidate all the process and provide a "hassle; free" experience to user, and generate a win-win situation to supplier / banker.
I can't really quantify a number for this solar system. Let's assume we have 3.2 mil rooftop (total of residential houses in Malaysia) and about 100,000 factories. Only less than 1% installed with solar. This is a huge potential recurrent income in the card. Any expert here can contribute ?
Simple calculation : Based on expected PAT of RM15mil with enlarged share of 440 mil shares, EPS will be 3.4sen. Based on PE of 20x, then TP will be around 70sen. (I have been using the final enlarge number of shares after the 1:2 BI. The weighted average number of share will be much lower). We will expect the PAT will grow at least 10% p.a for next 5 years. It looks "not sexy" in the short term, but will going to be sexy in a long term.
BV is well known as a sharp investor and those who follow his stocks usually get good returns. But keyword is Investor (long term view) and not Trader (like some of us here) so be prepared to hold this stock for a longer period to enjoy higher returns.
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Posted by CoolJay > 2020-10-23 16:23 | Report Abuse
0.61 very good support. i re-entered at 0.62