Rexit takeaway ( opinion on the company at current price of 0.81
Rating : overweight
Fundamental - second board market which has one of the highest roe of 23% - dividend yield of 3.5% (this shows management is rewarding their investors although they are a small cap) -cumulative revenue has been increase steadily for past year from 2million per quarter to 5 million per quarter - profit increase compare to last quarter was not because of revenue but more towards reducing in cost (shows good cost management) - net cash of 20million (small caps company with net cash? Seems pretty good) - profit margin of 39% (good cost control profit margin increase from 35% to 39%) - they have been maintaining above 30% profit margin
*Bursa transfer to main board listing requirements* 1. Profit after tax of 3 to 5 years of minimum 20 million (rexit has achieve 21million cumulative past 4 years - achieved) 2. Minimum of 6 million the recent profit after tax (rexit recent profit after tax is 7.5million -achieved target) 3. Market capitalisation of 500 million (rexit have not achieved that due to undervalue share price - if their share price were to go up they would have achieved this requirement)
Our take, it has achieve the listing in main market requirement. Depends on the directors of the company on their strategic goals of their company. It is advisable for shareholders to start asking the directors in agm.
Business view - they are expanding their business overseas which u can see an increase of 20% revenue from overseas (sign of expansion?) - started growing its document management system (many companies now are developing document management system to control and manage their documents retention/ business continuity and tax purposes),especially electronic document management system - they have wide ranges and reputable clients like cimb/ public bank/ may bank/ kenanga, etc - expansion to Thailand to open up their business platform - some of the reputable shareholders include credit suisse/ Singapore bank, etc. -introducing new workflow management system for legal documentation
Risk - unpredictable economic circumstances (as they are IT centric might affect IT businesses) - fail/delay in expansion plan -political/election risk
P.s. buy at own risk and research further before buying
There are more than 50% of the counters that drop and rexit still manage to maintain their profit and sales with 3 eps dividend payout. Defensive stock to hold and booyeah is right. they have satisfy main market listing requirements.
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....
K.v. Lim
294 posts
Posted by K.v. Lim > 2017-08-26 00:57 | Report Abuse
good result. Revenue and profit increase. Eps 1.24. Zero gearing. Cash rich. Should rally above rm1.00