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Thursday, May 21, 2015

IFCA MSC - Buying its Indonesia distributor?

IFCA’s 1QFY15 net profit, at 101% annualised, was in line with our expectations. The higher revenue was due to domestic GST software upgrades before the 1 Apr GST deadline. Last evening, IFCA also announced the proposed business acquisition of is Indonesia distributor, which was a positive surprise. To reflect conservative potential earnings from Indonesia, we raise our FY16-17 EPS forecasts by 8%. Our target price, based on an unchanged 21x 2016 P/E (in line with domestic peers), is also higher. The stock remains an Add. Potential catalysts include completing the acquisition of its higher-than-expected take-up rates for SaaS.

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