PETALING JAYA: GHL Systems Bhd is expected to register stronger growth in the second half of this year, underpinned by its robust transaction payment acquisition (TPA) segment and higher share services contribution.
According to UOB Kay Hian (UOBKH) Research, the payment service provider’s TPA segment is currently being driven by increased tourist arrivals, meaningful contribution from cross-border transactions and the e-tunai scheme introduced by the Malaysian government.
In addition, GHL is also well-positioned to benefit from the government’s initiative of an open payment system and the organic technology refresh with merchants and banks upgrading their terminals contribution in the next six months of this year, the brokerage noted.
UOBKH Research maintained its “buy” call on GHL, with an unchanged target price of RM1, pegged to 34 times the estimated price-earnings ratio for the financial year ending Dec 31, 2023. The brokerage said it was optimistic that GHL would see better results in the second half of this year, particularly in the final three months.
“More tourist arrivals in the second half of 2023 would be the icing on the cake to GHL’s record-high first-quarter transaction payment value (TPV) of RM7bil,” it said.
It pointed out that tourist arrivals in Asean were still not back to pre-Covid-19 levels, when foreign tourists contributed about 20% to 30% of the group’s total TPV. Tourists from China accounted for 20% to 25% of that contribution.UOBKH Research also noted that cross-border transactions had started making a meaningful contribution to GHL’s TPA segment, with cross-border TPV soaring 200% quarter-on-quarter and 600% year-on-year in the first quarter of 2023, coming off a low base.
“We expect more cross-border transactions with GHL integrating Alipay+ into their terminals, allowing them to support cross-border transactions via QR code payment,” it said.
As for the e-tunai scheme, the government would be crediting RM200 to eligible youths (university students aged 18 to 20) by the end of June 2023, as announced for the revised Budget 2023. This should benefit GHL.
Meanwhile, the government’s recent efforts to promote open payment systems for tolls and public transport could also benefit GHL with stronger demand for payment terminals, UOBKH Research said.
“Banks’ upgrade of payment terminals would also boost terminal sales volume,” it said.
It noted that GHL had cleaned up inactive merchant touchpoints in Thailand, but the group’s management expected the impact to be cushioned by the resilience of the retail space and the commencement of direct acquisitions in the Philippines and Thailand.“GHL is expanding into micro lending services, disbursing RM10mil in 2022 and RM20mil in first-quarter 2023 in Malaysia.
“The lending business’ targeted customers would be GHL’s merchants as GHL has access to their transactions and business data for better risk management,” UOBKH Research said.