FIGURE 1: AWANBIRU
TECHNOLOGY BERHAD LAST 5 YEARS SHARE PRICE TREND
**analysis
based on 2020 annual report.
1.
GENERAL
INTRO: AwanBiru’s core business is providing Microsoft
software to government agencies.
2.
NOTABLE
POINTS:
a. In FY2020, AWANBIRU's Software & Services
segment accounted for the bulk (95.0%) of Group Revenue, followed by Employment
Services (2.9%) and Training & Certification (2.1%).
b. In 2018, one of AWANBIRU's major contract with
the government (SKIN contract) was terminated abruptly. This development dealt
a serious blow to the Group's bottom line and earnings.
c. Also, in September 2020, AWANBIRU was notified
by Microsoft that it will stop AWANBIRU’s role as Channel Partner by January
2021. As Microsoft is a major supplier for its Software & Services
business, this represents another major setback since revenue derived from
Microsoft products and services accounted for the bulk of its business.
d. Currently the Group is working on a potential
partnership with Google Cloud to provide cloud-based data services to
Malaysia's public sector agencies, which very likely helped it to regain losses
and return to profitability.
3.
IS
THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE RANGE (RM million): 154 million as
reported in 2020 annual report, this is a low revenue company. Between year 2012-2020,
the counter’s revenue has been on a significant rising trend. However, both of
the Profit Before Tax (PBT) and Profit After Tax (PAT) are on a decreasing
trend.
b. SHARE PRICE: from Jan 2016 to Jan 2021, share
price dropped gradually from RM3.00 to around RM0.40, since Jul 2020, share price
has surged to around RM1.00.
c. EARNING PER SHARE (EPS): earning per share in
last 3 years was overall fluctuating, ranging from -6.09 to 3.7 sen.
d.
PRICE TO EARNINGS (P/E) RATIO: N/A
e.
FUTURE POTENTIAL/PROSPECTS: share price expect
to be stable in the next few years.
f. CAPITAL EXPENDITURE (CAPEX): spending on purchase
of new fixed assets and other investments amount to about RM 0.5 million, which
is around 0.17% of total assets. This shows that the management is not making a
major investment in the future growth and expansion of the business.
4.
IS
THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND YIELD: in 2020 financial year, AWANBIRU
did not declare a dividend payout to its shareholders.
b.
DIVIDEND PAYOUT RATIO: N/A
c. CONSISTENCY: This counter’s dividend payout has
been inconsistent (dividend paid to shareholders in 3 years out of 5 years) in
the last five years, whereby dividends paid to shareholders ranged from 0 to 3 sen per share.
5.
IS
THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN ON EQUITY (ROE): in 2020 financial year, AWANBIRU
reported a poor return of shareholders’ equity, at -14.13%.
b.
COST-TO-INCOME RATIO: N/A
c. DEBT-TO-EQUITY (GEARING) RATIO: Its gearing
ratio is at 154%, whereby its debt level is more than its equity, resulting in
an unhealthy balance sheet.
d.
CASH FLOW: cash flow is negative, at around RM -1.15
million, equivalent to RM 0.00 per share.
6.
OTHER
INDICATORS:
a. SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is well supported by institutional investors, there are 13 institutional
investors at top 30 major shareholders list, including a few investment funds but
not including insurance funds. Its major shareholders are Areca Dynamic Growth
Fund (14.55%) and Affin Hwang Multi-Asset Fund (15.31%).
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