KUALA LUMPUR: Affin Hwang Capital Research has maintained its Buy call and unchanged target price of RM2.54 on Scicom Bhd as it remains optimistic on its ability to secure more BPO contracts and growth in student visa processing.
Scicom's Q1FY18 revenue decreased 12% y-o-y due to changes in clients' requirement resulting in reduced billables, but its core net profit of RM11mil came in line with Affin Hwang Research's expectations.
"Core net profit for 1QFY18 actually improved slightly by 1.1% yoy due to an improvement in the EBITDA margin at 28.7%, which is tracking ahead of our FY18E expectations of 24.1%, likely due to a better contribution from its higher-margin EMGS segment," said the research firm.
"We like Scicom as we think it is an attractive e-government service play, underpinned by stable earnings from student visa processing. We are also positive on Scicom’s growth moving forward with the replenishment of BPO
contracts."
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