Stock Name: CENSOF
Company Name: CENTURY SOFTWARE HOLDINGS BHD
Company Name: CENTURY SOFTWARE HOLDINGS BHD
| Research House: OSK | Price Call: BUY | Target Price: 0.57 |
THE BUZZ
After securing twocontracts worth a total of RM33.5m from Pertubuhan Keselamatan Sosial(Perkeso) last week, Century Software's (CSHB) wholly-owned subsidiary, CenturySoftware (M) SB, has landed two more contracts totaling RM5.6m from Lembaga Hasil Dalam Negeri (LHDN)to provide maintenance services as well as upgrade the latter's StandardAccounting System for Government Agencies (SAGA) for a period of 2-3 years. Itwill also supply and install the related hardware and peripherals to ensure thesuccess of the assigned contracts.
OUR TAKE
No alterations to our forecasts but positive overall. We are positive with this 2ndcontract announcement in a week given that this beefs up the company'sorderbook to about RM74.1m. However, we are keeping our current FY12/FY13earnings forecasts of RM20.3m/RM21.6m since we had earlier factored in somecontract wins from its identifiable prospective projects of RM36.5m, with asuccess rate of 80%.
Maintain BUYrecommendation at RM0.57. Given the slight pullback in the company's shareprice last week, we think this presentsa good opportunity for investors to accumulate CSHB shares. Based on ourcalculations, the company offers an attractive dividend yield of 4% atonly a FY12/FY13 PER of 7.2x/6.8x, inaddition to a capital appreciation ofsome 34% to our fair value (FV) of RM0.57, which is based on 9x FY13 PER.Compared to the high PER valuation of 20x and 2% dividend yield of MYEG, its closest listed proxy on Bursa Malaysia, the company makes an even more attractive
investmentproposition. We maintain our BUYrecommendation, based on the company's coup in securing some RM39.1m worth ofcontracts within a week, as well as the potential of landing new projects worthsome RM36.5m.
Source: OSK188
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