DBS Bank. Analyst report by Lee Keng LING on 3 Jan 2019.
Silverlake Axis IPO was on 12 Mar 2003. It is a software solutions and services provider in the following industries:
South East Asia
North East Asia
Revenue and Earning
FYJun18 revenue grew 8% to RM541M with operating profit increasing by 21%.
FYJun19 revenue and operating profit growth is expected to be meaningfully higher. This is driven by a substantial increase in order-book to RM380M for Software projects and licensing which will be recognised between FY19-20.
Stock price and contracts booked
Price ranges between $0.39 ~ $0.44 from Sep-2018 to Jan-2019.
Chart 3 is an interesting analysis from DBS Bank analyst Ling; indicating possible co-relation between price and contracts booked.
HNA was a substantial shareholder until Nov-2017 when its holding was reduced to 4.93% or 130M shares. Co-Chairman Wang Jain was the architect for many of HNA acquisitions. Since his passing on 3-Jul-2018; the company had been disposing its assets to reduce debt of as much as S$130B. Assets being disposed include NYC Building, CWT Logistics and very likely Silverlake Axis.
General market view was that HNA progressive unloading of Silverlake Axis stocks capped price from trending up despite positive outlook and valuation from analysts.
Is HNA disposal completed?
After a married-deal of 37.5M shares changed hand on Tue 29-Jan; price rallied on Wed 30-Jan-2019 closing at $0.47 from $0.435 open. Jan-2019 volume traded was almost 162M shares while only 304M shares were transacted in 2018.
Have HNA completed disposal of its Silverlake Axis asset?
Regardless, technical resistance have been breached and traders & investors could enjoy an overdue rally or uptrend.
Note on 8-Apr-2020
Company buyback have increased significantly in 1Q20. Transaction typically around 30% of daily volume. Importantly, the firm is still buying when price is firm on the upside. Goh Peng Ooi own 65.27% and Company purchase have increased from 2.01% in Nov-2019 to 3.76% as of 3-Apr-2020. Is privatisation on the card?