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Saturday, October 11, 2014

CIMB Research initiates coverage on IFCA, TP 78 sen (Star)

CIMB Research has initiated coverage on IFCA MSC Bhd with a target price of 78 sen based on 21 times 2016 P/E.

The research house said in a note to clients that potential catalysts for the stock included stronger-than-expected GST jobs, potential dividends and a move to the Main Board in 2016.

“We project IFCA’s three-year net profit CAGR (compound annual growth rate) to be 228%. Profit margins should expand quickly as revenue growth from the domestic and China markets is expected to accelerate,” it said.

IFCA is an enterprise software solutions provider mainly for the property development, golf clubs, hotels and construction sector.

The company dominates in the domestic property sector, with around 70% market share. Most of the major domestic property developers, such as Sime Darby, SP Setia, EcoWorld and Mah Sing, are its customers, CIMB wrote. 

China and the domestic software migration from Windows-based to web/mobile platforms should keep the company busy after the completion of the GST jobs, it said adding that IFCA was also looking to expand its regional reach.

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