Well-deserved re-rating. Second board-listed VADS (RM3.10) has indeed done well, tagging on 23% since our recommendation upgrade on Feb17. We see this as just the start of a “catching-up” process for the under-valued IT player, especially following its recent analysts’ briefing which has reinforced our optimism.
Different in more ways than one. As it is, VADS is rather different from many of its listed IT peers. Valuation-wise, it is the cheapest at low-teen price-earnings ratio (PER), while a strong balance sheet with RM21mil net cash at end-2003 (52 sen per share) supports above average dividend yield of 2.4%.