"BPO will never disappear, and it will continue to grow with AI. In the next five years, Malaysia will be very strategic, which it already is for the BPO industry.
As of now, many big giants in the BPO industry are already establishing themselves in Malaysia, while five years ago they didn’t consider being in Malaysia. For example, Teleperformance, Concentrix, 24-in touch, UBase, and the list goes on." "The general view about BPO is that it's a call center or a contact center, but BPO is an industry, and call centers and contact centers are part of it, along with other verticals such as back office, knowledge outsourcing, solution outsourcing, etc."
Challenge facing from Scicom: The industry itself is bracing for change with the threat of substitute products and services such as the advent of technology driven innovation such as AI and RPA by customers enabling them to reduce their transactional volume and therefore their cost to serve their customers.
Scicom Berhad (0099) operates in the thriving sector of Business Process Outsourcing, catering to a diverse clientele of over 50 prominent companies including Petronas, Lenovo, Oppo, Digi, and many more, showcasing a robust and diversified revenue stream. Its notable partnerships with industry leaders such as Petronas, Lenovo, and Digi underscore its credibility and reliability.
Notably, Scicom plays a pivotal role in facilitating e-government services, including handling the EMGS in Malaysia for processing Foreign Student VISAs and e-government services in Cambodia, positioning itself as a key player in driving digital transformation in the region.
With a clean balance sheet boasting zero debt and a history of prudent financial management, Scicom has demonstrated resilience and stability. Since its listing in 2005, it has rewarded shareholders with three bonus issuances and maintained a consistent track record of quarterly dividend payments, reflecting its commitment to shareholder value.
Furthermore, Scicom's robust financial performance is underscored by its high Return on Equity (ROE) and Return on Assets (ROA), indicating efficient utilization of resources and profitability.
With a current price of 1.08 and a dividend yield of 7.43%, Scicom presents an attractive investment opportunity, coupled with its solid fundamentals, established market presence, and potential for further growth. Additionally, its sizable workforce of around 3900 employees reflects its capability to manage and scale operations effectively.
In summary, Scicom Berhad stands as a compelling investment proposition in the Business Process Outsourcing sector, driven by its strong client base, prudent financial management, and commitment to shareholder value, poised for continued growth and value creation in the foreseeable future.
Agreed 1.08 price point places this counter as undervalued. Low participation by inst funds; KWSP & Eastspring listed 2%+ ea with most concentration to insiders. Drivers for higher prices upward of RM1.80: - more institutional take up - harnessing Ai into their offerings
For now, one of few counters paying consistent dividend (high) every quarter. So entry at 1.08 is a good deal for long term accumulation & compounding.
AI is becoming a valuable tool for BPO companies. BPO companies can significantly reduce repetitive tasks using robotic process automation (RPA) and AI. By improving productivity and efficiency. BPOs will become even more effective investments. Integrating AI and RPA is the most anticipated emerging trend in business process outsourcing industry.
Next report due late May'24 for qtr ending Mar'24 One of few counters paying dividends every quarter, pretty decent yield ~7.4%(TTM). Price upper bound by 1.12~1.16 levels. Still pretty decent PER 13, not bid up by speculators. Stable, slow and steady.
@amilytay @c328 One needs to approach Ai cautiously. Yet to see any initiative from SCICOM, in fact they could enhance their ticker quality by putting out a professional Nasdaq-style quarterly slide deck.
@awp380, is the dividend of 8 cents sustainable? I used to owned Scicom, and sold it off at 1.14. Now I have extra money, and plan to buy it back at this pricing but worry the profit is not sustainable. When profit drops, I worry the dividend yield will drop...
I used to hold scicom in 2022 and 2023 until the CHATGPT released. it has shaken the long term investor to think, whether this Ai will affect Scicom business or its a boaster to Scicom business. In this bull market 2024, all boring dividend stock has move up slightly, at least beat KLCI that up 10%. This is not hater comment, i do like scicom as a dividend stock, but the future prospect is still unclear.
To bad with those hard selling people failed to realize the potential risk of a stock paying out dividend every QR ratio equal to the PAT. Let's see how deep it will dive tomorrow, best of luck
Not sure how investors say scicom cash flow is healthy. Earn 7m payout 7m dividend is definitely not healthy at all. Note this down for future reference whenever u decide to go for "dividend"
Thanks @gankm. Affin's TP of RM1.10 is not too far away from what i'm looking at too. SCICOM management has openly acknowledged in their recent QR that AI is indeed a threat to its BPO business, and has been working on a few in-house developed AI models leveraging on ChatGPT to gradually substitute its traditional human outsourcing business .. This is truly AI at work, and successful rollout of these AI based customer service chatbot to its existing client base wud be a significant game changer for SCICOM .. Re-collecting SCICOM again since my last exit at RM1.20 ..
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Goreng pisang
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Posted by Goreng pisang > 2024-01-08 09:07 | Report Abuse
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