Having already set foot in Cambodia and Vietnam, the Group had on 8 January 2020 entered into a joint venture with Thailand’s Simat Technologies Public Company Limited (“Simat Technologies”) to provide point of sales equipment and retail software solutions to retailers in Thailand. This is the first time the Group penetrate into Thailand’s F&B sector. The Group aims to tap into Thailand’s huge retail market with this venture and ride the gradual rebound of the retail sector in Thailand.
A growing software gem. We believe RGTech will continue to benefit from the digitalisation trend and greater adoption of technology in the retail landscape. The growing recurring income nature of the business and stickiness of clientele are the springboards for its sustainable growth. At the current valuation of 17x FY21 P/E, its secular growth prospects and scalable business model are underappreciated compared to peers in the e-payment or software space, with P/E valuation ranging from 20-40x. The stock is also under-researched and under-owned by institutional shareholders, which stand at <c.2%. Fair value. Pegged to 25-28x target P/E, given its scalable business model and customer stickiness in the fast-growing software space, the stock could fetch a fair value range of MYR0.38-0.52 based on FY20F- 21F earnings. We are positive on its near-term earnings growth potential, given that the business is still at its infancy stage with so much underserved opportunities both locally and regionally.
(Source : RHB Small Cap company : 20 Jewels 2020 Edition)
As RGTech charges transaction based fees, we expect the recurring income base to grow in tandem with increasing clientele as well as growth in stock keeping units (SKUs) or sales, given the current digitalisation trend. Note that FY19 saw its revenue contribution from in-house software grow by 112%, mainly contributed by the increasing adoption of its AX Retail B2B Portal software. We expect the strong growth trend to continue with a CAGR of 27% in the next three years on the slew of contract wins, growing recurring base income and better margins of its software segments.
there is not much competitor in Malaysia can beat Rgtech good business model with retail automation from money transaction to inventory control and warehouse stock replenishment one line thru online services.
when you think of factory automation machine you will auto think of pentamaster and vitrox but when you think of retail services and system automation you will definitely think of RGTECH.
share market is like this when price is low and not moving, hardly any chats when i bought esceram at 20cts, hardly any chats in a day now the price at 50cts, very active chats by retailers
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....
AQVARIO
42 posts
Posted by AQVARIO > 2020-07-03 12:42 | Report Abuse
All onboard? Ready to fly? Must be today cannot tomorrow anymore.. Tomorrow time to sleep... :)