OCK (RM0.72) – share price has fallen 32.7% from its high
achieved in August. Current technical indicator oversold with weekly RSI @ 35
and MACD on verge of cutting up, presenting an opportunity to Accumulate a
growth stock. The recent LOA from MCMC for Phase 1 of the USP Timeline 3
project further strengthen OCK’s chances of being awarded a further 600 sites
under Phase2 & 3 of the USP project. There is also a possibility of Co
undertaking additional works on a sub-contract basis for other USP recipients given
its good reputation. Trading at an undemanding FY15 PER of 12x vs industry
average of 20x, we rate OCK an Accumulate for its strong earnings growth
prospects, focus on recurring revenue base and ventures into high growth
emerging markets. (SPK)
GHLSYS (RM0.715) – is an excellent proxy to capitalize on growing
ASEAN e-commerce and e-payment industry. We see both stability and growth in
its business model emerging from its acquisition of e-Pay with annuity revenue
forming 92.8% of total revenue. The Payment Card Reform Framework by Bank
Negara and its target of 800k point-of-sales (POS) terminals from current 230k
and 1bn issues of debit card by 2020 is a major boost for GHL’s growth
prospects. Furthermore, recent agreement with Omnipay (Philippines) bodes
well for Co’s expansion and expects to start deploying its point-of-sales (POS)
terminals in 1Q’15. Emergence of private equity firm Creador as 2nd
largest shareholder and appointment of its two directors will potentially fast
track any M&A activities with an expected announcement in CY15. Balance
sheet remains healthy with net cash of RM8.8m. Currently trading at FY15 PER of
28.4x vs MYEG @ 33.3x, we recommend an Accumulate on weakness. (SPK)
