FIGURE 1: REVENUE GROUP
BERHAD LAST 2 YEARS SHARE PRICE TREND
**analysis
based on 2020 annual report.
1.
GENERAL
INTRO: REVENUES’s core business is providing
payment solution platform.
2.
NOTABLE
POINTS:
a. REVENUE provides payment solutions to banks,
nonbank institutions, physical store merchants, online store merchants and
e-money payment scheme, including e-Wallets such as BOOST, Touch ‘n Go and
GrabPay.
b. In FY2020, the Group's overall revenue increased
by RM19.53 million or 33.7% to RM77.51 compared to FY2019, its EDC terminals
segments was its largest revenue contributor (60.9%), followed by electronic
transaction processing segment (20.9%) and solution & services segment
(18.2%). The higher revenue recorded in FY2020 was mainly attributed to the
higher sales in the EDC terminal segment.
c. However, its profit before tax (“PBT”) decreased
by RM0.63 million to RM10.78 million in FY2020. The lower PBT margin was due to
higher administrative expenses to support its business growth and a change in
the GP margin contribution from the business segments.
3.
IS
THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE RANGE (RM million): 77.5 million as
reported in 2020 annual report, this is a low revenue company. Between year 2015-2020,
the counter’s revenue has been on a significant rising trend. The Profit Before
Tax (PBT) and Profit After Tax (PAT) are also on an overall rising trend. This shows
that REVENUE is highly potential growth stock.
b. SHARE PRICE: from Jan 2018 to Jan 2021, share
price ranged from RM1.30 to around RM1.50, since Feb 2021, share price has
surged to around RM2.00.
c. EARNING PER SHARE (EPS): earning per share in
last 3 years was overall fluctuating, ranging from 1.85 to 4.61 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 13.3
million, which is around 10.8% of total assets. This shows that the management
is optimistic about the future prospect of the business, hence proceed to
invest more in the future growth and expansion of the business.
4.
IS
THIS A STRONG DIVIDEND STOCK?
a.
DIVIDEND YIELD: in 2020 financial year, REVENUE
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 0 years out of 5 years) in
the last five years.
5.
IS
THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN ON EQUITY (ROE): in 2020 financial year, REVENUE
reported a good return of shareholders’ equity, at 12.44%.
b.
COST-TO-INCOME RATIO: the cost-to-income ratio
is 624%, which is in the medium range.
c. DEBT-TO-EQUITY (GEARING) RATIO: Its gearing
ratio is at 81%, whereby its debt level is less than its equity, resulting in a
healthy balance sheet.
d.
CASH FLOW: cash flow is positive, at around RM 33.8
million, equivalent to RM 0.08 per share.
6.
OTHER
INDICATORS:
a. SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is well supported by institutional investors, there are 14 institutional
investors at top 30 major shareholders list, including a few investment funds but
not including insurance funds. Its major shareholders are Ng Chee Siong (13.86%),
Ng Shih Chiow (14.03%) and Ng Shih Fang (13.9%).
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