Translate This Page

Thursday, February 26, 2015

GHL Systems Bhd (TP: 1.11) - CIMB

4Q14 highlights
Revenue in 4Q14 rose to RM49.6m vs. RM16.2m a year ago, mainly due to
higher contributions from the transaction payment acquisition (TPA) segment,
which grew from RM4.1m to RM36.7m following the acquisition of e-Pay. GHL
incurred a higher tax expense of RM3.1m during the quarter, partly due to
additional RM1.2m in deferred tax expenses. Nonetheless, the company still
recorded a higher core net profit of RM2.7m (vs. RM0.3 core net loss in 4Q13),
after adjusting for impairment on trade receivables, inventories and intangible
assets amounting to RM2.3m.

TPA-driven growth still on track
GHL is in the process of integrating its back-end system to the various banks in
order to implement its TPA agreements to accept international credit cards.
Management highlighted that the bulk of its effort in 2015 will be directed
towards TPA initiatives in Malaysia and the Philippines. To recap, GHL is
targeting to sign up 3,000-4,000 merchants in Malaysia following its
agreement with Global Payments this year. Meanwhile, it also targets to sign up
300-500 merchants per month in the Philippines to accept payments using
UnionPay and JCB International cards. Management expects its first TPA
merchants to be on board in 2Q15 and expects more merchants recruited in
2H15, which is in line with our expectations.

Maintain Add
Accumulate GHL. Overall, we think that GHL’s growth prospects are intact and
we are still confident of its execution strategy.

No comments: