REXIT BHD
KLSE (MYR): REXIT (0106)
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0.74
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-0.03 (3.90%)
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2024-11-21
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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....
anarchysons
20 posts
Posted by anarchysons > 2020-11-09 10:58 | Report Abuse
REXIT BHD - An undiscovered net cash tech gem
- Caters to the high-growth insurance and financial services industries
- Developed and currently operates mySalam, which is the Government’s national health protection scheme.
- Has one of the lowest PE ratio (14 times) in the tech industry.
- It is the third highest dividend yield stock in tech industry (3.85%). FY2020 ended June 30 dividend payout ratio was 55.46%.
- Sales revenue grew at a compounded annual growth rate of around 30% for the past 6 years.
- Major shareholders hold over 60% stake in Rexit, CEO holds over 40%. Free float is 25%.
- Sits on a cash pile of RM14.3 million with zero debt
- Serves many clients across Malaysia, Singapore, Thailand and Hong Kong. Among them are Allianz, Zurich Insurance, AmAssurance, Sompo Japan, RHB Bank, Al-Rajhi Bank, Public Mutual and Affin Hwang Capital.
- Has a 5-year contract with Great Eastern Takaful for mySalam portal
- Links JPJ and insurance companies electronically via the Reward Link Gateway System.
- Business is somewhat “recession-proof”. While most businesses faced a sharp decline in financial performance during the second quarter of 2020 due to MCO, Rexit’s net profit surged by 33% y-o-y on the back of a 14% y-o-y increase in revenue.
- In FY2020, despite all the market challenges, Rexit enjoyed a 37% net profit margin, which was an increase from 34.7% in FY2019.
- ROE was solid at 24%.
- Asset-light business with the value of property, plant and equipment only accounting for 10% of its total assets.
Growth intact moving forward
1. Rexit has strong growth potential in the e-government space, having developed and operated the mySalam portal. Its business model and expertise in the IT field can be easily replicated to deliver more online public services as the Government accelerates its IT adoption.
2. Rexit’s e-Cover product offering puts the company on the right track to capturing market opportunities in the booming e-commerce segment. The stronger adoption of e-commerce by businesses as a result of the COVID-19 pandemic is undeniably a boon for Rexit.
3. Most importantly, Rexit is well positioned in the ever-growing insurance and financial services industries. Growing population and the increased awareness for insurance and risk protection will definitely be an organic growth catalyst for Rexit.
4. The company’s R&D operations in China will help it to easily capture growing market opportunities, by enabling it to mobilise resources across the region for any upcoming projects.
5. With zero debt and a significant cash pile as major support, Rexit is also well positioned to undertake mergers and acquisitions for inorganic growth moving forward.
Read more here:
https://klse.i3investor.com/blogs/anarchysons/2020-11-09-story-h1535691200-REXIT_BHD_An_undiscovered_net_cash_tech_gem.jsp