cch1975 - Sri Lanka and Indonesia are not major contributors at the moment. Sri Lanka is home ground to the MD but changing political situation make it inherently more tricky to land projects. Indonesia, again is more of a call center for now but potentials are great.
Scicom is in a BPO + services business. Major clients are mostly MNC. While people never think of them an e commerce company - they are very much the backend enabler (from a software stand point) i.e. to the tune of tracking the delivery of pizza and the location of the delivery boy etc.
Even as a call center, they are not the cheapest in the region (Phil is much cheaper) but they delivered quality and add on services - which is really the lucrative part. Thats why they keep adding new clients
cch1975, you need to think further about education - With ringgit depreciating, Malaysia has been able to attract more foreign students from around the region (not necessary the best quality..). This will augur well for education providers like SEGI, HELP and INTI etc, except the HELP and INTI have been privatized so no play for you there! With more foreign students, EMGS will likely able to process more foreign student visa applications and thus more profitable. That's why you need to infer from SEGI recent results which grew 50+% in 1Q2015.
I did not quite understand pumag's statement about expand student pass processing for the whole country? They have been doing for all the private universities and will expand into public universities (UM and UKM etc) and language schools (prob by 2HCY2015). Also, I believe this is substantially less political than say MYEG or Prestariang (esp Prestariang, which depends on Msia govt as a pay master) , the project with EMGS has enabled the turn around time of visa processing and approval to shortened substantially and improved the attractiveness of Msia as a study destination.
I always think that is just complimentary biz - to train people for their own Call Center business etc. Never a real profit contributor per se. Having said that, assuming the MAS contract comes through in 2H (or FY16), it should give it a big boost, for one to two years at least (and you should thus get some extra dividend! haha)
cch1975: That is really a tough question to answer - much depends on what the company can deliver consistently and what people are willing to pay for it (i..e market is still healthy) from a PER angle.
Assuming it can delivers an EPS of RM0.13-RM0.14 for FYJune16 (hoping this year - FY15 to come in at around RM0.10-RM0.11 per share), then we should see RM2.80 - RM3.00 (based on similar matrix to CIMB's valuation of Myeg FYDec16 PER of 21.6x)
Is it possible? Well yes! Is it probable? Sure! But this is of course provided all stars are aligned :). Then again people are paying up for very much less in some of the names.....
good morning - it is very hard to know how the stock will move on a day to day basis, sometimes some institutions need to sell for their own reasons and is not fully base on fundamentals. I think interest is still there but Scicom need a catalyst and hopefully the 3Q results will provide that.
International college? Is this not the training school? I believe it is not the main driver of their earnings growth.
But I suppose colombo centre should be growing because they secured seylan bank, Toshiba etc. Mocics do you think their education profit will contribute hugely as the CEO said before? Their total client now more than 40?
The results are actually decent - not quite 'out of the park' so to speak.
So what is to come going forward? With MAS reorganization in full swing, we could potentially see the training contract kicking in by 3Q2015, so that should provide a good booster to the earnings at least for a year. Other biz is expected to show good growth as well as they are bidding for many contracts...
The 2c interim is very good - considering that it has a 1 for 5 bonus issue back in Nov 2014, consistently growing.
Long term investors should continue to hold on to the stock and buy on any pull back!
Mocics Why u said scicom can overtake myeg in term of mkt cap . I saw myeg a lot buyers daily and mkt cap above 1bil . Scicom only 750mil . The gap is too huge.
You are right that the gap is still quite large: Myeg's market cap is RM3.0bn vs Scicom is RM750m. However, dont forget MYEG's market cap was only around RM500m in 2013 (nobody looks at it then) and it has increased six-fold since. Similarly, Scicom's market cap has gone from RM200m to now RM750m in the last eighteen months.
What I am saying is that if Scicom can execute is growth plan well over the next two years (growing @ 40-50% p.a.), with a bit of luck, it can get rerate one more time by the investment community.
Dont get my wrong, I liked MYEG but has since sold my position (after the multi-baggers gain). Personally, I feel MYEG has seen increasing risk given current political situation and the risk reward ratio is no longer in my favour. Scicom is more diversify given the list of international clients and can thus expand regionally with relatively ease.
So at this juncture - I like Scicom better, risk reward wise...
I wonder, why ppl are chasing this stock despite its expensive valuations? P/B ratio of 10 with intrinsic value of just 70sen. But no doubt, its ROE is attractive at 40% and is cash rich. It pays attractive dividend per year of up to 10sen ( approx 5%) which is quite good.
Generally speaking, P/B is not a good measure for this type of service orientated and asset light company - they dont own building or heavy machinery or air planes! Look at all the tech company to a certain extend. What you are paying for is the management's skill set to grow the revenue stream. As you also rightly point out, ROE of 40% and cash rich - and more importantly willingness to pay out dividend to investors.
Any recent projects they secured besides Axiata in colombo, Fujitsu, Lenovo and Ctos mocics? I heard they are providing call centre to some banks in Sri Lanka. So far i only know is seylan bank. Any other banks?
Looking at the current market with weak government, 1mdb n economics will scicom be drag down as well. Should we make some profit now then buy back when it drops
Any recent projects they secured besides Axiata in colombo, Fujitsu, Lenovo and Ctos mocics? I heard they are providing call centre to some banks in Sri Lanka. So far i only know is seylan bank. Any other banks?
I think stick to fundamentals is still the best strategy. The current weakness presents good opportunities for investors that can see the longer term value to buy....
Selling seems to be well adsorbed yesterday. 1.5m shares traded (vs normal day of 500k+) - which is quite decent for this stock. I think it will continue to recover towards the 2.2-2.3 level given increasing institutional involvement.
shazza - The dividend will be paid today (22/6). Yes, the MD bought shares on 16th June. So far his timing has been pretty good - he buy on pull back and just accumulate.
cch1975 - I heard they are in talks with several clients at the moment; some of which are pretty chunky (with job scope go beyond just providing seats for BPO but more for consultancy works etc)
I dont think Public is fully aware of it also - it does not really capture the attention of all the day traders..may be only after it reached RM3....haha
Foreign institutions are into myeg for a while now and as such you will be more trading. Scicom is still early day, most institutions are not willing to let go at this level. I know of at least one local institution owning more than 6% of the company....When foreign institutions finally participate into Scicom, expect to worth more than RM3....if all goes well of course..haha
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cch1975
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Posted by cch1975 > 2015-05-16 07:22 | Report Abuse
Mocics How do you view about their sri lanka and Indonesia business? Thanks.