Quick take: Orion IXL share price up 9% on new coverage

KUALA LUMPUR: Orion IXL Bhd’s shares rose almost 9% in early trade Thursday, after CGS CIMB Research initiated a coverage with a “add” recommendation.

The financial technology and business solutions provider rose 8.82%, or 1.5 sen to 18.5 sen. It is currently the second most active counter with over 34 million shares exchanged hands. Orion-WA gained 15.79%, or 1.5 sen to 11 sen with 8.3 million shares traded. 

“We initiate coverage on Orion with an add rating and target price of 33 sen in view of the earnings growth potential from its new fintech business,” CIMB said.

Orion provides computerised maintenance management system (CMMS) services but has been losing money over the past few years.

A new management team took over the company in 2017 and has since developed a fintech solution specialising in financial transaction management systems, using big data analysis (BDA), artificial intelligence (AI) and blockchain technology

“Orion plans to turn around from net loss in FY6/18 by diversifying into fintech for end-to-end microloan applications and AI credit engine platform

“If successful, we estimate this could lead to significant improvement in its net profit to RM14.4mil in FY21F,” CIMB said.

The research house said Orion had in October 2018 got its big break in the fintech space when its 20%-owned associate Sukaniaga Sdn Bhd entered into an agreement with ANGKASA to provide a fintech end-to-end loan application and approval platform called ‘MyAngkasa Az-Zahra’ (MyAzZahra) for its credit co-operatives to offer microloans to government staff.

“We project MyAzZahra to handle the approvals for RM1bil microloans by FY20F and RM3bil by FY21,” CIMB said.

Orion recently signed an MOU with Indonesia’s PT Kirana Investima Nusantara to develop a platform for microloans to be used in its 75,000 provinces.