Reporting by writer BacalahMalaysia.my
AppAsia Bhd, has been valued at 68 sen from the current share price of 47 sen, by Japan’ Rakunten.
The world’s third largest retail broker expects the stock to out perform the FBM Kuala Lumpur Composite Index benchmark index by as much as 10 per cent over the next six months.
The information, communications and technology provider has zero borrowing, while its net cash postion is around RM3.2 million.
Rakunten expects AppAsia’s pre tax profit to jump from RM2.7 million to RM11.2 million.
“Buy AppAsia with a target price of RM0.68 premised on 25 times price-to-earnings ration for financial year 2021 as per Bursa Technology Index,” Rakunten said in a report to investors.
The re-valuation of AppAsia has a lot to do directly with the company’s recently secured contract which has given the firm a monopoly as the sole service provider for electronic bank confirmation platform in collaboration with the Malaysian Institute of Accountants.
This is set to be the game changer for them and we expect to see significant contributions from 2021 onwards when it becomes the new normal for audit confirmation,” the research firm said.
AppAsia recently launched its eConfirm.my APPASIA which is the first and only industry-wide electronic bank confirmation platform providing electronic banking confirmation to all the auditors and banks operating in Malaysia.
The agreement with MIA will last for 12 years until 2030, with a pay-per-transaction revenue model.
The usage fee is RM15 per successful confirmation, thus generating income on a recurring basis.
The usage of the platform will provide mutual benefits to both the auditors and banks.
Compared with the traditional method, this platform enhances efficiency and security of the bank confirmation process.
Among AppAsia’s clients are major banks such as Maybank, RHB Bank, OCBC Bank, Deutsche Bank and all the top audit firms in Malaysia such as Deloitte, Ernst & Young, KPMG and PwC. – BACALAHMALAYSIA.MY